Independence Day (July 3, 2026)

Renewed expectations for further Federal Reserve tightening kept the dollar supported as policymakers continued to warn about persistent inflation risks. 

Global markets entered the week balancing tighter monetary policy against signs of easing Middle East energy risks. The Federal Reserve remains the main macro driver after raising rates to 3.75%–4.00%, its first hike since 2023, and signaling that another increase remains possible this year. The Dollar Index advanced to 100.4, while Treasury yields remained elevated. The Bank of Japan also tightened policy, raising rates to 1.25%, although dissent within the board suggested that future increases could come at a slower pace.

Easing oil prices offered some relief to financial markets as renewed diplomatic efforts in the Middle East reduced immediate inflation concerns.