Memorial Day (26-27 May, 2025)

Global markets remained under pressure as rising bond yields, elevated energy costs, and hawkish Fed expectations strengthened the outlook for higher interest rates. 

Global markets remained focused on escalating Middle East tensions as rising oil prices strengthened inflation concerns and expectations for further monetary tightening. 

Global markets entered the week with renewed focus on Federal Reserve tightening after Chair Kevin Warsh used his Jackson Hole address to push back against expectations that US inflation pressures were fading. The Dollar Index held near 99.6 after Friday’s sharp advance, while Treasury yields moved higher and precious metals retreated. Markets raised the probability of a September Fed rate hike to 57% from 40% a week earlier as Warsh reiterated the Fed’s commitment to returning inflation to its 2% target.