Federal Reserve

Marking his 100th day in the job, Federal Reserve Chair Kevin Warsh told the Kansas City Fed’s symposium in Wyoming that the US economy has strengthened rather than weakened under recent shocks, that the labour market is consistent with full employment, and that inflation remains the central bank’s dominant concern.

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Warsh declined to say what he would do next month, but he removed most of the arguments against acting and bolstered the ones in favour of a rate hike.

“For my part, today I am impressed by the overall performance of the economy, which appears to have strengthened,” Warsh stated.

“One indicator of strength is how well an economy holds up to shocks. On that score, both Main Street and Wall Street have been remarkably resilient,” he added.

On inflation, Warsh noted that the PCE index stood at 3.7% over twelve months and 4.1% over six, and 54% of the basket’s components rose by more than 3% over the past year, against 32% in the two decades before the pandemic.

Summer readings that beat expectations “do not tell me that underlying trends have meaningfully improved,” Warsh stated.

The Federal Reserve Chair’s conclusion was blunt: “the Fed’s predominant focus right now should be on prices.”

The standard set was equally direct. “We must be confident that underlying inflation is moving to our objective, clearly and at sufficient speed. Otherwise, we have work to do,” Warsh declared.

That assessment matters because it eliminates the case for supporting growth with further stimulus and potentially opens the door for restrictive measures as markets moved in response.

At the time of writing, the 10-year Treasury yield has fallen 0.5% from its Friday high to 4.67% and the 30-year dropped around 0.9% to 5.16%, while the dollar index rose 0.4% from the intraday low to roughly 99.4 points.

Traders raised the implied probability of a 0.25% hike at the 15 and 16 September Fed meeting to 55%, from around 35% before Warsh’s speech.

Performance of the US economy

Warsh opened his speech with what he called a hinge point in history, arguing that artificial intelligence has advanced faster than even its advocates predicted.

Annualised AI token sales at the two leading labs alone exceed $100 billion, he said, up more than 500% in a year.

AI is “a new variable, potentially a new factor of production,” raising questions the Fed cannot answer yet such as whether it will lift productivity and when, whether it complements or replaces labour, and where the returns will ultimately land.

A new Federal Reserve task force on productivity and jobs is examining it, though he stressed its recommendations will have no bearing on current policy decisions.

Warsh then listed extensive evidence for his positive outlook on the US economy.

Business investment in equipment and intangibles growing at around 9%, its fastest since 2021, with more than half of this year’s capital expenditure growth attributable to the AI buildout.

S&P 500 profits went up more than 20% over the year, credit spreads are near historic lows and banks are easing lending standards. Housing and agriculture are strained, Warsh acknowledged, but on balance he “would be hard pressed to describe broad financial conditions as restrictive.”

Unemployment at 4.1% is low by historical standards, with jobless claims near their lowest in decades, leaving inflation as the outlier.

No forward guidance

The Federal Reserve Chair devoted a substantial section to defending his refusal to signal future moves, a stance that has drawn criticism since he took office in May.

Forward guidance was adopted during the 2008 crisis by colleagues including himself, he said, and was essential then, but “the practice has overstayed its welcome” and now “risks creating ambiguity in the name of clarity.”

Warsh warned of a hall-of-mirrors problem in which markets read the Fed while the Fed reads markets, leaving both blind to new developments.

“We should not indulge a regime in which market participants are looking primarily to the Fed for their next trade,” he said, adding that the costs of such errors fall not on “financial high-fliers” but on households facing high inflation or insecure jobs.

Warsh also rejected calls to publish an explicit reaction function, arguing economic knowledge does not permit a mechanical rule.

Instead he set out six principles: interrogate incoming data rather than trust stale figures, accept that judging supply against demand is imprecise; treat the 2% PCE target as firm and fixed; pursue both mandates without treating them as a trade-off; rely on short-term rates rather than unconventional tools; and remember that money itself matters.

“I stand here today committed to a discipline, not to a decision,” Warsh said in closing.

The decision comes on 16 September at the next Fed meeting.

Aug. 28 (UPI) — Economists and financial markets will be watching closely on Friday when the Federal Reserve Chairman Kevin Warsh delivers a keynote address at the central bank’s annual symposium in Jackson Hole, Wyo.

Federal Reserve chairmen often use the speech to discuss monetary policy initiatives on a broad level, including offering insight into future interest rate plans. Since being appointed chairman in May, Warsh has been scant with details on future policy decisions and Friday’s address is expected to be more of the same.

The U.S. economy continues to face inflation pressures with inflation rates well above the Federal Reserve’s 2% annual target. Under Warsh, inflation markers have moved higher yet while the Federal Open Market Committee has maintained its benchmark interest rates at 3.5% to 3.75%.

Some members in the central bank are calling for another hike in interest rates, which would be a first since July 2023.

“If I had to guess, I would say that he’s going to give a very high-level, broad look at the work of the task forces and how he thinks the Fed should operate, as opposed to a nuts-and-bolts assessment of the economy and expectations for policy,” Luke Tilley, chief economist at M&T Bank and Wilmington Trust Investment Advisors, told CNBC.

Warsh has established five task forces that are reviewing how the Federal Reserve approaches its policy decisions, including its use of data, technology including artificial intelligence, and its balance sheet.

The Federal Open Market Committee did not meet in August. Its next meeting is on Sept. 15 and 16, during which it will decide whether to hold interest rates firm or make adjustments.

After Warsh’s address following last month’s FOMC meeting, yields for long-term bonds rose. This happens when bond traders are skeptical that the central bank will cool inflation.

Aug. 26 (UPI) — The Justice Department and FBI announced Wednesday that they seized two platforms used to target U.S. critical infrastructure and other sensitive networks.

The seizures were of two hacking platforms called QScan and QTRouter, which were used to hack U.S. infrastructure sites, the press release said. The affidavit described a Chinese state-sponsored group known as QTFY whose members are employed by China-based Nanjing Xinjiuwei Network Technology Company that has hacked into NASA, the Federal Reserve, the Department of Energy, Department of Justice, Department of Health and Human Services, National Institutes of Health, and the U.S. Senate.

“Federal law enforcement investigated and disabled [China’s] malicious software, the latest in a series of technical operations to dismantle indiscriminate hacking activities sponsored by the People’s Republic of China,” Attorney General Todd Blanche said in a statement.

“These court-authorized seizures deny [China]-linked hackers access to tools they use to mount online attacks against our Nation’s critical infrastructure,” said Assistant Attorney General for National Security John A. Eisenberg in a statement.

According to court documents, QTFY offers computer hacking services to its paying customers, including China’s army and Ministry of State Security. These computer hacking services include QScan and QTRouter, which work in conjunction, the press release said.

QScan scans and automatically infects thousands of internet-of-things devices worldwide, which are then added to the QTRouter network of QTFY-controlled devices. QTRouter consists of these compromised IoT devices, as well as commercial proxy service devices and leased virtual private servers. QTRouter then serves as an obfuscation network — meaning it allows QTFY and other malicious cyber actors to conceal the China-origin of their computer intrusion activities because the malicious communications appear to originate from computers that are outside of China and may even be local to the targeted networks.

Because the seized domains were hard-coded into the QScan and QTRouter malware and used for essential tasks such as communication and authentication, the court-authorized seizures made QScan and QTRouter inoperable.

Aug. 19 (UPI) — The U.S. Treasury Department announced Wednesday that it will buy back about twice the usual amount of its bonds in a move to prevent rising interest rates on mortgages and consumer loans.

The department, which is led by Secretary Scott Bessent, said it will target the 10- to 20-year and 20- to 30-year portion of the market. Those bonds have faced a buyers’ strike since late June, CNBC reported.

Treasury said it will at least double the maximum size of its usual buyback, from $2 billion to “at least” $4 billion, an announcement from the department said. The buyback operation will be from Sept. 9 through Nov. 4.

The yields on longer-term debt have been at their highest levels since 2007, pushed up by war with Iran and other concerns, such as growing competition for financing with borrowers and growing federal deficits, Politico reported.

After the announcement, yields plummeted, while stock market futures spiked, CNBC reported.

The 10-year note dropped 6 basis points to 4.647% and the 30-year bond plunged 9 basis points to 5.196%. A basis point equals 0.01%. Yields and prices move in opposite directions.

It’s the latest move by Bessent to affect treasury yields.

The department conducted a joint operation with Japan to boost the yen, which was trading at its weakest against the dollar in about 40 years. He had warned in January that Japanese government bonds were causing issues in the U.S. treasury market.

The department also recently alluded to possibly issuing less longer-term debt in the future, Politico reported.

“This increase in buyback operation sizes reflects Treasury’s desire to provide greater liquidity support in longer-dated nominal sectors where there is consistent strong sponsorship from market participants, as evidenced by the significant volume of high-quality offers Treasury routinely receives in longer-dated buyback operations,” the department’s press release said.

The move “can help crowd in potential buyers tempted by the prior run-up in yields and force some near-term short-covering, while discouraging investors from going max short in the future for fear of being ambushed again,” Krishna Guha, head of global policy and central bank strategy at Evercore ISI, said in a client note, CNBC reported.

“But the operation changes almost nothing in terms of the fundamentals, in particular the unchanged need to finance the tidal wave of hyperscaler debt in addition to very large government deficits,” Guha added.

It could actually end up making the Federal Reserve‘s job of getting inflation back to 2% more difficult, said RSM Chief Economist Joe Brusuelas.

The buyback could artificially suppress yields and make controlling inflation more challenging.

“Bessent is a political actor. His interest is purely short-term and is organized around the upcoming election and not a return to price stability,” Brusuelas wrote.

The “family fight” over setting the Fed Funds Rate that Federal Reserve Board Chairman Kevin Warsh has desired resulted in the Federal Open Market Committee (FOMC) maintaining its current 3.5% to 3.75% target at the second meeting under his leadership.

“I asked for a good family fight, and I got one,” he said at Wednesday’s FOMC post-announcement press conference. “That’s the purpose… Most of our discussions were on the big questions that matter to the conduct of monetary policy.”

The two-day fight addressed the impact of five years of high inflation on current policy, the effects of strained supply chains and resulting price increases, and the role of monetary policy and strategies in achieving price stability.

“There was nothing inertial about that discussion. It was an active, robust discussion about what’s in the full range of what we can do and might want to do in the period ahead,” he said.

Unlike June’s unanimous vote to maintain the FOMC’s target rate, Beth M. Hammack, president and CEO of the Federal Reserve Bank of Cleveland; Neel Tushar Kashkari, president and CEO of the Federal Reserve Bank of Minneapolis; and Lorie K. Logan, president and CEO of the Federal Reserve Bank of Dallas, voted to raise the Fed Funds Rate by 25 basis points.

The division nearly matched the CME Group’s FedWatch Tool, which estimated a 68.5% chance the FOMC would maintain its rate and a 31.5% chance of an increase to 3.75%-4%, based on the 30-Day Fed Funds futures price.

Inflation Target

Acknowledging that supply chain shocks in energy and other sectors have kept inflation above the FOMC’s 2% target, Warsh noted that little could be done to cure inflation in the nine weeks since he became chairman or to achieve a month of modest price decreases.

“For some households, businesses, and market professionals, five years of high inflation have left a mistaken impression… that the Fed’s implicit inflation target was somehow above 2%,” said Warsh. “Let me reiterate: There is no soft inflation target. There is no soft implicit target. Not on this committee’s watch. There’s only a target, and it’s 2%.”

No Jackson Hole Preview

Keeping true to form, Warsh shared that he has not yet begun his speech for the Jackson Hole Economic Symposium in August, which has historically set the stage for what the FOMC would do in the second half of the year.

He said he would like to ask the “big questions” about what is happening to productivity, demographics, and the global economy amid the current economic shocks.

“I haven’t made a decision whether it’s going to be a big-picture speech or whether it’s going to be a more traditional setup for all the action we’re going to have between September and December,” he said. “I will tell you one other thing I’m doing between now and Jackson Hole. I’m checking in with those task forces [that I announced in June].”

July 29 (UPI) — The stock market opened with the Dow falling 400 points on Wednesday ahead of the Federal Open Market Committee’s latest interest rate decision.

The committee will announce its decision on Wednesday afternoon with Federal Reserve Chairman Kevin Warsh making his second address since being appointed. Economic indicators point to the Fed holding interest rates at a target range of 3.5% to 3.75%.

“My colleagues and I recognize that high inflation has been an undue burden on American households and businesses,” Warsh said during a Senate Banking Committee hearing earlier this month. “The members of our committee have no tolerance for persistently elevated inflation and we share a resolute commitment to restore price stability.”

The war in Iran has increased economic pressure, driven by rising fuel costs as the United States and Iran use the crucial Strait of Hormuz as a point of negotiation. The annual inflation rate rose to 4.2% in May on the back of rising gas prices.

The Federal Reserve has maintained a target goal of 2% annual inflation rate.

The average fuel price in the United States is $4.09 per gallon for regular grade gasoline on Wednesday, AAA reports.

The Federal Reserve will announce its interest rate decision at 2 p.m. EDT, followed by an address by Warsh at 2:30 p.m. EDT.

July 16 (UPI) — U.S. retail spending was weaker than expected while tourists from around the world came to the country for the World Cup.

Retail sales rose 0.2% in June from a revised 1% in May, and up 6.7% from June 2025, the U.S. Census Bureau said Thursday. Expectations from the data firm FactSet were at 0.3%.

The World Cup and Amazon‘s Prime Day helped boost spending, but lower gas prices slowed the rise. Excluding gas sales, June spending rose 0.7% after 0.9% in May.

A measure of retail spending that removes sales of building materials and gasoline rose 0.5% in June, which is down from 0.8% in May, but slightly higher than the expected 0.4% increase, CNN reported. It shows consumer demand continued steadily in June.

Strong economic growth along with rising inflation means that the Federal Reserve is less likely to lower interest rates. For the Fed to cut rates, inflation would need to slow to toward the 2% annual target or signs of a slowing economy, CNN said.

“Despite challenges, consumers are still spending and the labor market shows no signs of cracking,” Ellen Zentner, chief economic strategist at Morgan Stanley Wealth Management, wrote Thursday.

“This type of data won’t move the Fed’s needle either way, but it underscores the ongoing resilience of the U.S. economy.”

Another economist said the second half of the year’s economy could slow even more.

“A renewed slowdown in spending, however, beckons over the second half of this year,” Oliver Allen, senior economist at Pantheon Macroeconomics, wrote in an analyst note Thursday.

“The lift to cashflow from tax refunds now has faded, leaving consumers far more exposed to the real income shock from the jump in gas prices.”

Seoul shares again plummeted Thursday, led by steep losses in technology heavyweights, as escalating tensions in the Middle East weighed on investor sentiment. The Korean won rose against the U.S. dollar.

After opening 4.45 percent lower, the benchmark Korea Composite Stock Price Index (KOSPI) extended its losses to close at 6,820.60, down 463.81 points, or 6.37 percent from the previous session, after falling as low as 6,730.87.

The Korea Exchange, the country’s bourse operator, activated a sell-side sidecar on the KOSPI for 20 minutes at around 9:10 a.m. after the benchmark index fell more than 5 percent.

The decline came after the index surged 6.24 percent Wednesday as softer-than-expected U.S. inflation data eased concerns about near-term Federal Reserve interest rate hikes.

Adding to investor jitters, the Bank of Korea (BOK) raised its benchmark interest rate by a quarter percentage point to 2.75 percent earlier in the day, the first increase in 3 1/2 years, to curb inflation amid escalating tensions in the Middle East.

The U.S. launched fresh strikes on Iran, escalating tensions in the Middle East and renewing concerns over potential disruptions to regional energy supplies.

“Profit-taking followed sharp gains in technology stocks a session earlier, while persistent concerns over the semiconductor industry kept the index under pressure,” Kang Jin-hyeok, an analyst at Shinhan Securities Co., said.

Institutional and foreign investors sold a net 2.37 trillion won (US$1.6 billion) and 1.38 trillion won worth of shares, respectively, while retail investors bought a net 3.66 trillion won.

Technology stocks led the decline.

Market bellwether Samsung Electronics plunged 8.77 percent to 255,000 won, while rival chipmaker SK hynix tumbled 11.53 percent to 1,842,000 won.

Top automaker Hyundai Motor fell 2.07 percent to 425,000 won, while steelmaker POSCO Holdings slipped 0.95 percent to 311,500 won.

Among gainers, shipbuilder Hanwha Ocean rose 5.73 percent to 86,700 won, while leading beverage firm Hitejinro gained 2.47 percent to 14,910 won.

The Korean won was quoted at 1,480.4 won against the U.S. dollar at 3:30 p.m., up from 1,484.7 won the previous session.

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July 14 (UPI) — The consumer price index for the year ending in June rose 3.5%, less than economists expected, the U.S. Bureau of Labor Statistics reported Tuesday.

For the month, consumer prices fell by 0.4% due in part to the energy index dropping by 5.7%. It was the largest decline in the energy index in more than six years, following a spike in energy prices due to the Iran war and closure of the Strait of Hormuz.

The consumer price index decline for the month followed a 0.5% increase in May, also making the decrease a six-year best for a single month.

The energy index remains high for the 12 months ending in June, up by 15.7%. This is bolstered by a 26.7% increase in the index for gasoline.

Energy services decreased by 0.7% on a per-month basis, putting the annual rate of inflation at 3.9%. Electricity fell by 1% to an annual 4% increase while utility gas service rose by 0.5% to an annual 3% rate of inflation.

June’s index beat estimates by the Dow Jones consensus, which projected a 0.2% decrease in the consumer price index with annual inflation at about 3.8%.

The index for all items not counting volatile food and energy, known as core inflation, remained steady between May and June. Core inflation measured at 2.6% for the year ending in June after reading at 2.9% in May.

The index for food rose by 0.2%, as did the indexes for food at home and food away from home. The annual index for food rose by 3%.

Tuesday’s report comes as new Federal Reserve Chairman Kevin Warsh appears before Congress. In his prepared remarks, Warsh will tell Congress that the “number one objective is to get monetary policy right.”

“That is our clear and constant aim, the star we steer by,” Warsh’s prepared statement reads. And if we get policy right — and we will — the inflation surge of the last five years will be a thing of the past.”

WASHINGTON  — The Supreme Court on Monday gave President Trump new power to fire the heads of most independent agencies created by Congress — but not the Federal Reserve.

Chief Justice John G. Roberts Jr. announced two opinions, one of which bolstered the president’s power as the chief executive and a second which said this authority did not extend to the Federal Reserve board.

The first was a 6-3 decision that had the support of five conservatives, while the second had a 5-4 majority that included the three liberals.

Roberts, a former White House lawyer, has long been skeptical of independent agencies whose officials may wield regulatory power in conflict with the views of the president.

Since the 1880s, however, Congress has at times created independent agencies led by a bipartisan board of experts. In 1935, a unanimous Supreme Court had upheld these multi-member boards and commissions.

But Roberts and the court overturned that precedent and declared it conflicts with the executive power of the president.

“Our Constitution creates three branches, but only one President,” he wrote. “To discharg[e] the duties of his trust, the President must have the assistance of officers he can trust. … Subordinates who exercise the President’s power are subject to removal by him. Then, and only then, can they remain accountable to the President, and the President to the people.”

The decision upholds Trump’s firing of Rebecca Slaughter, one of two Democratic appointees on the five-member Federal Trade Commission.

The Supreme Court upheld President Trump’s firing of Rebecca Slaughter, a Democratic appointee to the Federal Trade Commission.

(Graeme Sloan / Bloomberg / Getty Images)

In dissent, Justice Sonia Sotomayor said that the ruling “distorts the structure of government to fit the majority’s theory of unitary, total executive control. The result is a President who emerges with far greater power than ever before. It is a power, however, that neither the People, nor Congress, nor the Constitution bestowed upon him.”

Under what has been dubbed the “unitary executive” theory, the court’s conservatives believe the president’s executive power in Article II of the Constitution overrides Congress’power in Article I to write the laws and structure the government.

The departments and agencies of the federal government exist only because Congress created them by law.

But in the second opinion, the court blocked Trump’s bid to fire Fed Governor Lisa Cook, an appointee of President Biden.

Roberts said the central bank dates back to the nation’s founding, and Congress created the Federal Reserve Board in line with “our Nation’s tradition of central banking protected from political interference.”

Trump tried to fire Lisa Cook in a social media post, he said.

But “the Federal Reserve’s Governors do not serve at the President’s pleasure — they instead serve staggered 14-year terms, and may be removed only ‘for cause’,” he wrote.

Justice Brett M. Kavanaugh cast a crucial vote to support the Fed’s independence. He said he joined the majority because it “confirms the longstanding historical practice and understanding that the Federal Reserve is an independent agency whose Governors enjoy for-cause removal protection consistent with Article II of the Constitution.”

The court did not finally decide on Cook’s case, except to say she deserved due process of law. She could not be fired without a hearing and evidence, the court said.

The setback for independent agencies came as no surprise, however.

Even prior to Trump’s election, Roberts has insisted agency officials must be accountable and under the control of the president.

Last year, the justices blocked lower court rulings that would have reinstated agency officials who were fired by Trump.

For most of American history, however, it had been understood that Congress had the power to structure the government and to create semi-independent agencies to carry out specific tasks like regulating railroad rates or the money supply.

These agencies and commissions were led by a bipartisan board of experts who were appointed with a fixed term. They could be fired only for cause, not because of a political disagreement with the president.

The Supreme Court upheld these multi-member commissions in 1935 on the grounds their work was more legislative and judicial than simply enforcing the law.

But the court’s current conservative majority has contended these commissions and boards wield executive authority and are therefore, subject to direct control by the president.

In creating such bodies, Congress often was responding to the problems of a new era.

The Interstate Commerce Commission was created in 1887 to regulate railroad rates. The FTC, the focus of the court case, was created in 1914 to investigate corporate monopolies.

The year before, the Federal Reserve Board was established to supervise banks, prevent panics and regulate the money supply.

During the Great Depression of the 1930s, Congress created the Securities and Exchange Commission to regulate the stock market and the National Labor Relations Board to resolve labor disputes.

Decades later, Congress focused on safety. The National Transportation Safety Board was created to investigate aviation accidents, and the Consumer Product Safety Commission investigates products that may pose a danger. The Nuclear Regulatory Commission protects the public from nuclear hazards.

Typically, Congress gave the appointees, a mix of Republicans and Democrats, a fixed term and said they could be removed only for “inefficiency, neglect of duty or malfeasance in office.”

Slaughter was first appointed by Trump to a Democratic seat and was reappointed by Biden in 2023 for a seven-year term.

June 29 (UPI) — The U.S. Supreme Court ruled Monday that Congress’ restriction of the president from firing independent agency employees without cause violates the separation of powers.

The court upheld President Donald Trump‘s firing of Rebecca Slaughter, a Democratic member of the Federal Trade Commission, overturning 90 years of precedence. The ruling came down along ideological lines with the conservative majority upholding Slaughter’s firing in a 6-3 decision.

Writing the majority opinion, Chief Justice Roberts said Congress’ “for cause” removal protections, meant to shield independent agencies from political influence, violate the separation of powers.

“What text, history, and structure settle, our precedent confirms — the president may remove his subordinates at will,” Roberts wrote.

Justice Sonia Sotomayor wrote in the minority opinion that the decision has given the president “far greater power than ever before.”

“It is a power, however, that neither the People, nor Congress, nor the Constitution bestowed upon him. In granting the President this unbridled authority, the Court upends its precedent, misconstrues our history, and sheds any pretense of judicial modesty. I respectfully dissent.”

The court’s decision upends the precedent set in 1935 in the case Humphrey’s Executor vs. United States. The high court in that case ordered that Congress could restrict the president from firing members of the FTC without cause.

“Although it is up to the Senate to decide whether to confirm those with whom the President would prefer to work with, neither Congress nor the courts may saddle him with those with whom he cannot work,” Roberts wrote. “Subordinates who exercise the President’s power are subject to removal by him. Then, and only then, can they remain accountable to the President, and the President to the people.”

While the high court allowed Trump to fire Slaughter, it rejected his bid to fire Fed Governor Lisa Cook from the Federal Reserve for the moment.

Trump attempted to pause a federal court ruling that prevented him from firing Cook last year. A lawsuit was filed challenging the attempt. In a 5-4 ruling Monday, the Supreme Court rejected the attempt by Trump.

Roberts penned the majority opinion in this case as well, joining the three liberal justices and conservative Justice Brett Kavanaugh.

“Not only the fact of independence but also the appearance of independence is key to the Federal Reserve’s design,” Roberts wrote.

Seoul stocks surged by more than 2 percent past another historic landmark, surpassing the 9,000-point level for the first time in history, as investors bet on chipmakers in the face of a hawkish stance by the Federal Reserve and Iran uncertainty.

The benchmark Korea Composite Stock Price Index (KOSPI) closed up 199.6 points, or 2.25 percent, to 9,063.84, after rising as high as 9,106.07.

The KOSPI continued its winning streak for the sixth consecutive session on the back of optimism over artificial intelligence (AI) and related sectors.

Trade volume was heavy at 505.9 million shares worth 49.9 trillion won (US$32.7 billion). Foreigners were net buyers, snatching up 1.3 trillion won, while retail and institutional investors net sold a combined 1.2 trillion won.

Losers outnumbered gainers 109 to 788.

The index bucked overnight losses on Wall Street caused by Fed policymakers’ remarks that a rate hike would be inevitable to tame inflation.

The continued rally was led by the country’s two major chipmakers, Samsung Electronics and SK hynix, said analyst Kim Seok-hwan from Mirae Asset Securities.

“Investors are anticipating that semiconductor companies could gain better bargaining power due to a sustained supply bottleneck,” the analyst said.

A risk appetite was also revived on anticipation the U.S.-Iran war is nearing its end. The United States has said Iran has agreed to reopen the Strait of Hormuz, a key oil shipping route, and revealed a signed memorandum of understanding on ending the war.

The rate freeze from the Fed, the fourth consecutive on-hold decision, appeared to have a limited impact on investor sentiment.

Market top cap Samsung Electronics rose 4.62 percent to 362,500 won, while its rival SK hynix jumped 6.51 percent to 2,685,000 won.

Non-semiconductor sectors lost ground.

Defense giant Hanwha Aerospace fell 2.86 percent to 1,189,000 won, ship builder HD Hyundai Heavy Industries retreated 3.25 percent to 684,000 won, and major financial firm KB Financial inched down 0.55 percent to 163,100 won.

The Korean won was quoted at 1,527.1 won against the U.S. dollar, down 13.7 won from the previous session.

Bond prices, which move inversely to yields, closed lower. The yield on three-year Treasurys rose 4 basis points to 3.75 percent, and the return on the benchmark five-year government bonds added 5.2 basis points to 3.949 percent.

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Published on
17/06/2026 – 12:55 GMT+2

The era of Chair Warsh begins in earnest this Wednesday, as US President Donald Trump’s pick to run the Fed presides over his debut rate decision and steps before the cameras for his first press conference in the role.

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Few economists anticipate dramatic action on day one, but the meeting carries unusual weight for what it might reveal about the months ahead.

Policymakers are expected to hold the benchmark rate steady at a target range of 3.50% to 3.75%, which would mark the fourth consecutive meeting without a move. The committee cut 25 basis points in December 2025.

The bigger question is the language, with officials potentially revising their post-meeting statement to drop any hint that the next step will be a reduction, signalling instead that rates may stay elevated for some time, or even rise should inflation prove sticky.

Warsh inherits a far less accommodating picture than the one he faced when he was widely seen as campaigning for the job last year.

At that time, he argued forcefully for lower rates, echoing US President Donald Trump’s demands, and pointed to AI as a force that could expand the economy’s productive capacity and tame prices over time.

Many economists doubted that thesis even then, noting that the surge of investment in semiconductors and computing equipment was adding to inflationary pressure rather than easing it.

A changed economic backdrop

Inflation has indeed accelerated since the outbreak of the Iran war in late February, climbing to a three-year high of 4.2%, driven largely by costlier petrol.

US President Donald Trump has announced a framework for a peace deal that could end the conflict, but it is unclear whether the truce will hold, and prices for fuel, groceries and airfares could take months to cool even if Middle Eastern oil flows freely again.

By the Fed’s preferred gauge, inflation has now run above its 2% target for more than five years. Hiring, meanwhile, has remained resilient.

May brought 172,000 new jobs, a third straight month of solid gains, removing much of the rationale for the two rate cuts the Fed had pencilled into its January projections.

Because the rate itself looks settled, attention turns to the Fed’s updated Summary of Economic Projections and its closely watched “dot plot”, the quarterly projection of future interest rates.

According to Bank of America economist Aditya Bhave, the new dot plot could show the Fed keeping rates on hold for the rest of 2026, with at least three of the committee’s 12 voting members potentially pencilling in rate hikes this year.

Communication is the other wildcard. Warsh has argued that the central bank should speak less often and keep a lower profile, on the view that publicly stated positions can trap policymakers into defending them well past their usefulness.

One option would be to thin out the calendar of press conferences, reverting to the every-other-meeting rhythm favoured by Ben Bernanke, who chaired the Fed from 2006 to 2014, when the format was introduced. Leaner guidance, however, risks unsettling markets long accustomed to clear direction.

Adding intrigue, predecessor Jerome Powell remains on the board as a governor, a seat he can hold until January 2028, and is expected to vote on Wednesday’s decision, denying the Trump administration an additional vacancy to fill.

Additional sources • AP

South Korean stocks nosedived more than 8 percent Monday, extending their losing streak to a third consecutive session, as investors dumped market heavyweights on renewed woes over artificial intelligence (AI) profitability and concerns over a possible hawkish pivot of the U.S. Federal Reserve.

The local currency rose against the U.S. dollar after opening at a 17-year low, in the face of verbal intervention by financial authorities.

The benchmark Korea Composite Stock Price Index (KOSPI) plunged 676.18 points, or 8.29 percent, to close at 7,484.41, after falling as low as 7,442.73. The secondary KOSDAQ index sank more than 9 percent to end at 911.39.

The KOSPI’s trade volume was heavy at 448.3 million shares worth 47.8 trillion won (US$31.2 billion), with losers sharply outnumbering winners 873 to 42. Foreigners and institutions dumped local shares worth 355.5 billion won and 1.6 trillion won, respectively, while retail investors scooped up 1.76 trillion won.

The Monday crash was largely anticipated on sharp losses on Wall Street last week, fueled by semiconductor shares’ biggest daily percentage drop since March 2020 and fears over a possible rate hike by the Fed sparked by a hotter-than-expected U.S. jobs report for May.

The Dow Jones Industrial Average closed 1.35 percent lower Friday (local time), while the S&P 500 dipped 2.64 percent and the tech-heavy Nasdaq composite slid 4.18 percent.

Major U.S. chip shares sharply lost ground, with Nvidia slumping 6.2 percent, Broadcom contracting 7.92 percent and Micron shooting down 13.25 percent.

The Korea Exchange (KRX) had activated a circuit breaker for the KOSPI about three minutes after opening, halting trading for 20 minutes, and implemented a consecutive sell-side sidecar at around 9:34 a.m.

The KRX had also issued a sell-side sidecar for the secondary KOSDAQ market about six minutes after opening, suspending trading for five minutes, and activated a circuit breaker for the index later in the day after the KOSDAQ fell by more than 8 percent.

“Today’s pullback appears to be driven not by the weakening of market fundamentals, but by profit-taking sentiment among investors, mainly targeted at the semiconductor sector, as the market reacted more sensitively to negative developments after an extended rally of chip shares,” a report by Samsung Securities said.

The KOSPI has been one of the best performing stock indexes across the world in recent months, surging to near the unprecedented 9,000-point mark on Tuesday last week from the 5,000-point level earlier this year, mainly driven by major semiconductor shares, including Samsung Electronics and SK hynix.

“There is a lot at stake in this week’s financial market, with U.S. inflation data, treasury yields and the ongoing debate over the sustainability of AI-related investment all unfolding simultaneously,” said Seo Sang-young, an analyst at Mirae Asset Securities.

Han Ji-young, a researcher at Kiwoom Securities, also anticipated a “challenging” week for the KOSPI, noting that the release of the U.S. Consumer Price Index for May, the SpaceX listing and Oracle’s earnings results planned for this week may weigh on the market.

Market analysts also said news that Iran and Israel traded strikes dampened investors’ risk appetite, dimming hopes for peace in the Middle East.

Market top-cap Samsung Electronics slid 10.18 percent to 295,500 won, while its chipmaking rival SK hynix dipped 7.68 percent to 1.91 million won.

AI investment firm SK Square nosedived 11.13 percent to 1.12 million won.

Samsung Life Insurance lost 8.97 percent to 375,500 won, and Samsung C&T plunged 11.29 percent to 408,500 won.

Top automaker Hyundai Motor plummeted 8.71 percent to 639,000 won, and its auto parts making affiliate Hyundai Mobis shot down 12.2 percent to 612,000 won.

Leading battery maker LG Energy Solution pulled back 6.16 percent, and its smaller rival Samsung SDI sank 11.44 percent.

Home appliances maker LG Electronics slipped 11.55 percent to 268,000 won, while power plant manufacturer Doosan Enerbility shed 10.25 percent to 85,800 won.

Internet portal operator Naver was among the few winners, jumping 9.2 percent on news that the company is conducting a joint project with U.S. AI chip giant Nvidia to build a massive global AI factory and the nomination of Han Seong-sook, former chief executive officer (CEO) of Naver and incumbent minister of small and medium-sized enterprises (SMEs), as South Korea’s new prime minister.

SK Networks surged 30 percent to 14,170 won on SK Group and Nvidia’s announcement of a broader partnership for AI infrastructure.

The Korean won was quoted at 1,535.0 won against the U.S. dollar at 3:30 p.m., up 4.1 won from the previous session, after opening at 1,555.2 won, the lowest mark since March 6, 2009, when the global markets were in a financial crisis.

The local currency turned higher after financial authorities vowed stern action against excessive volatility and one-sided movements in the foreign exchange market.

Bond prices, which move inversely to yields, closed lower. The yield on three-year Treasurys added 5.8 basis points to 3.940 percent, and the return on the benchmark five-year government bonds gained 7 basis points to 4.190 percent.

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June 4 (UPI) — Acting Director of National Intelligence Bill Pulte, whose new assignment has drawn bipartisan criticism, won’t be the “permanent” choice for the job, President Donald Trump said Thursday.

Trump, speaking to reporters Thursday the White House, said Pulte’s role as acting director of DNI to replace Tulsi Gabbard, which began Tuesday, would not be “permanent.”

Rather, the president said Pulte will be “very good” as he takes the job on for a “little while,” while also asserting he will be able to “figure it out quickly.”

Gabbard announced her resignation in May, saying she will step down June 30, and Trump’s pick of Pulte to replace her two days ago ignited a backlash among lawmakers of both parties.

A former housing developer and currently director of the Federal Housing Finance Agency, Pulte — a staunch Trump loyalist — has no experience in foreign intelligence work, a fact that has sparked criticism from both sides of the political aisle.

Sen. Thom Tillis., R-N.C., on Wednesday blasted Pulte as an “incendiary attack dog” for Trump who likely wouldn’t pass Senate muster for confirmation.

“I don’t think he has a prayer” of becoming the permanent DNI, Tillis told CNBC, adding that Pulte’s presence could hurt the GOP congressional majority’s efforts to reauthorize the part of the Foreign Intelligence Surveillance Act governing warrantless surveillance.

Similarly, Sen. Ron Wyden, D-Ore., a long-serving member of the Senate Intelligence Committee, decried the choice of Pulte for DNI director, saying Trump is “appointing his top political henchman to one of the most important positions for protecting the safety of Americans and preventing terrorist attacks like September 11th.”

Pulte, he said, “appears to be unscathed by intelligence or any semblance of ethics,” noting he has already used his post at a housing agency “to persecute Trump’s political opponents, including Senator Adam Schiff, New York Attorney General Leticia James and Federal Reserve Board member Lisa Cook.”

Pulte has alleged fraud against several of Trump’s foes in their mortgage applications, including Cook for claiming two different homes as her primary residence. She has appealed her firing by Trump to the U.S. Supreme Court.