Wednesday, 6/17/2026 p.m.

  • Markets close lower as Fed tilts more hawkish – The TSX and U.E. equity markets turned lower this afternoon following the conclusion of the Fed's June meeting. The Fed held rates steady and removed the projected 2026 rate cut from the dot plot, both of which were widely expected. However, the updated projections showed that several policymakers now see the possibility of a rate hike this year, though there was a roughly even split. Bond yields rose in response, with the move more pronounced at the front end of the curve, where yields tend to be more sensitive to monetary-policy expectations. The 10-year U.S. Treasury yield moved near 4.49%, while the 2-year yield rose more sharply to 4.21%. In energy markets, WTI oil prices rose modestly but remain in the mid-$70s after the recent decline tied to expectations for the Strait of Hormuz to reopen under the U.S.-Iran framework. Lower oil prices, if sustained, would likely help ease inflation concerns, though the situation remains fluid and could remain a source of volatility. Meanwhile, the U.S. dollar strengthened against major currencies but has remained broadly rangebound in recent trading.
     
  • Fed holds rates steady but signals possible hike – The Fed's Open Market Committee (FOMC) concluded its first meeting under new Chair Kevin Warsh this afternoon, leaving the target range for the fed funds rate unchanged at 3.5%-3.75%. Because the hold was widely expected, markets focused on the updated economic projections, changes to the policy statement, and Kevin Warsh's tone in the press conference. The policy statement was shortened significantly and shifted toward a more inflation-focused message, removing the easing bias and forward guidance. The most important changes were in the Fed's projections. Policymakers raised their inflation forecast significantly, which likely drove the removal of the projected 2026 rate cut from the dot plot. However, the committee appears more divided on the path forward, with nine officials projecting at least one rate hike, eight expecting no change and one still projecting a cut. Notably, Chair Warsh did not submit a forecast. At the same time, they lowered their near-term growth outlook — though still above trend — and upgraded their assessment of the labour market. That said, the inflation outlook could become more balanced if the U.S.-Iran agreement leads to a durable resolution and oil prices remain lower. In our view, this still points to a prolonged pause as the most likely outcome. For markets, a “higher-for-longer” rate backdrop, rather than a renewed tightening cycle, can remain supportive of valuations, in our view, particularly if it reflects resilient economic growth and gradually moderating inflation.
     
  • Retail-sales data reflects resilient consumer: U.S. retail sales grew 0.9% in May from the prior month, above expectations for a 0.6% increase and stronger than the downwardly revised 0.4% rise in April. Higher gasoline prices contributed to the headline gain, with gas station sales rising 3.4% month-over-month. Gasoline prices have since retreated, with the national average dropping to roughly $4.00 per gallon from about $4.30 throughout May, which should help provide some relief to consumers if the decline persists. Importantly, the strength in the report was not limited to gasoline, as control-group sales — which feed more directly into GDP — also rose solidly. We believe the report points to a consumer that remains resilient, supported by a steady labour market and wage growth. A key takeaway, in our view, is that consumers continue to spend despite weak sentiment readings, which should be supportive of continued economic growth.

Brian Therien, CFA;
Investment Strategy

Source for all data: FactSet

Investment Policy Committee

The Investment Policy Committee (IPC) defines and upholds Edward Jones investment philosophy, which is grounded in the principles of quality, diversification and a long-term focus.

The IPC meets regularly to talk about the markets, the economy and the current environment, propose new policies and review existing guidance — all with your financial needs at the center.

The IPC members — experts in economics, market strategy, asset allocation and financial solutions — each bring a unique perspective to developing recommendations that can help you achieve your financial goals.

Learn More

Important Information:

This is for informational purposes only and should not be interpreted as specific investment advice. Investors should make investment decisions based on their unique investment objectives and financial situation. While the information is believed to be accurate, it is not guaranteed and is subject to change without notice.

Investors should understand the risks involved in owning investments, including interest rate risk, credit risk and market risk. The value of investments fluctuates and investors can lose some or all of their principal.

Past performance does not guarantee future results.

Market indexes are unmanaged and cannot be invested into directly and are not meant to depict an actual investment.

Diversification does not guarantee a profit or protect against loss.

Systematic investing does not guarantee a profit or protect against loss. Investors should consider their willingness to keep investing when share prices are declining.

Dividends may be increased, decreased or eliminated at any time without notice.

Special risks are inherent in international investing, including those related to currency fluctuations and foreign political and economic events.