June and the Second Quarter of 2026 in Figures
June 30, 2026
Around the world, the monetary policy pendulum swung more decisively in the direction of restraint. Among the five central banks the table that appears in this monthly feature of Currency Thoughts, the Bank of Japan and European Central Bank each raised their key interest rate by 25 basis points in June, and none of the other three eased. Among other central bank interest rate changes, there were also 25-basis point point increases in Indonesia, Namibia, the Czech Republic, and the Philippines as well as larger hikes of 50 basis points in Moldova and 75 basis points in Colombia. A smaller group of central banks cut rates, those in Russia and Brazil, made moves of just 25 basis points.
While a tilt in the direction of restraint was to be expected eventually, it is happening sooner than had been anticipated coming into this year, and the reason behind this shift is the chain reaction set off by the war in Iran. This dynamic is unlikely to be reversed by the surprisingly fast restoration of the pre-conflict energy prices levels. The price of West Texas Intermediate crude oil plunged 30% in the second quarter, two-thirds of which occurred in June alone.
President Trump explicitly sought out a successor to former Fed Chairman Jerome Powell to coax U.S. monetary policy into a much lower interest rate environment, but Chairman Warsh’s initial press conference minced few words in laying out a plan that will prioritize restoring price stability over promoting employment growth at least for the coming few quarters. While ten-year sovereign debt yields fell in the second quarter in Germany, Switzerland, Great Britain and Canada, the 10-year Treasury yield climbed as money markets speculated over whether the FOMC is likely to raise its interest rate at two or three of the remaining four scheduled meetings in 2026. In Japan, which like the United States, has experienced above-target inflation for several years, the 10-year JGB yield also moved higher in 2Q.
Somewhat counter-intuitively, the dollar performed much better in June than May. The uncertainty stirred up by the war in Iran had generating safety-seeking hot money into the world’s dominant reserve currency. The war was unexpected and failed to inspire confidence around the world in America’s leadership and predictability. More than before, governments may be reassessing their U.S. asset portfolios. However, June was not without some positive developments such as today’s Supreme Court decision reasserting the the special nature of the Federal Reserve as both a regulatory agency but also the nation’s bank and therefore of the unqualified virtue of slapping political hands away from the monetary policy steering wheel. The AI frenzy also seems to be aiding the dollar and equities.
Stock markets most everywhere were strongly bid in June and the second quarter (see table below). Japan’s Nikkei-225 shot up 15% in June and nearly 40% in the quarter. To put the Nikkei’s story into even greater perspective, it took almost 3-1/2 decades until February 2024 for the Nikkei to climb back and over its late 1989 high of 38,916, and the index subsequently has nearly doubled that peak in the ensuing 2-1/3 years.
Crypto made news today as the lucrative source of the Trump family’s financial profits in 2025. The price of Bitcoin ironically dived 20% during June. Another historic competing store of value to regulated national currencies, gold, also took a bath in the month.
| 10-Yr Yield | 6/30/26 | Chg in June | 2Q26 Change |
| U.S. | 4.45% | +1 basis point | +13 basis points |
| Germany | 2.86% | -10 | -14 |
| Japan | 2.66% | +1 | +32 |
| U.K. | 4.76% | -5 | -15 |
| Canada | 3.37% | -4 | -10 |
| Switzerland | 0.25% | -11 | -6 |
| CB Policy Rate | 3/31/26 | Chg in June | 2Q26 Change |
| Fed funds target | 3.50/3.75% | 0 basis points | 0 basis pts |
| ECB deposit rate | 2.25% | +25 | +25 |
| BOJ policy rate | +0.75% | +25 | +25 |
| BOE Bank Rate | 3.75% | 0 | 0 |
| Swiss Policy Rate | 0.0% | 0 | 0 |
| FX | 6/30/26 | June Chg in $ | 2Q26 Change |
| EUR/USD | 1.1419 | +2.2% | +1.3% |
| USD/JPY | 162.61 | +2.1% | +2.5% |
| USD/CHF | 0.8085 | +3.6% | +1.2% |
| GBP/USD | 1.3226 | +1.8% | +0.1% |
| AUD/USD | 0.6920 | +3.9% | -0.3% |
| NZD/USD | 0.5677 | +5.5% | +1.2% |
| USD/CAD | 1.4200 | +3.0% | +2.1% |
| USD/CNY | 6.7990 | +0.5% | -3.2% |
| Equities | 6/30/26 | Chg in June | 2Q26 Change |
| S&P 500 | 7503 | -1.1% | +9.6% |
| Nasdaq | 26214 | -2.8% | +21.4% |
| Djia | 52319 | +2.5% | +2.5% |
| Dax | 24996 | +0.0% | +10.2% |
| Nikkei | 70062 | +15.2% | +37.2% |
| Ftse | 10497 | +0.8% | +3.2% |
| Canada TSE | 34833 | +0.6% | +6.4% |
| Swiss SMI | 14194 | +4.8% | +11.1% |
| Commodities | 6/30/26 | Chg in June | 2Q26 Change |
| Oil, $ per barrel | 69.5 | -20.9% | -30.6% |
| Gold, $ per ounce
Bitcoin, $ |
4038.5
58,783 |
-12.2%
-20.1% |
-13.7%
-13.7% |
Copyright Larry Greenberg 2026. All rights reserved. No secondary distribution without express permission.
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