18/09/2026
📊 WEEKLY FINANCIAL RECAP: The Fed Hikes, Oil Cools, and FX Reacts
The Federal Reserve was front and center this week, delivering a hawkish 25 bps rate hike while energy markets saw sharp geopolitical swings. Here is your complete breakdown of the key macro movements across global markets 👇
---
🇺🇸 The Fed & US Economy
The Federal Reserve delivered the week’s central event, unanimously hiking the federal-funds target range by 25 bps to 3.75%–4.00%.
* 2026 Projections (Hawkish Outlook): Median GDP growth projected at 2.3%, Unemployment at 4.1%, Headline PCE at 3.7%, Core PCE at 3.4%, and year-end policy rate midpoint at 4.1%.
* Retail Sales: Stronger than expected, jumping +1.2% MoM (+6.0% YoY) to $773.9B.
* Housing: Softer trend across the board with permits, starts, and completions all declining from July.
* Takeaway: Resilient consumer demand mixed with persistent inflation keeps financial conditions strictly restrictive.
---
🛢️ Oil & Geopolitics
Crude experienced a classic "spike and reverse" after initial Middle East risk premiums faded.
* Brent Crude: Dropped -9.0% from an early peak of $108.22 down to $98.44.
* WTI Crude: Fell -6.6% from $102.25 to $95.51.
* Key Drivers: Early supply concerns following disruptions to Saudi energy infrastructure and Red Sea/Hormuz shipping risks eased as Saudi crude was rerouted via Oman and East-West pipeline repairs progressed. U.S. commercial crude inventories slid by 640K barrels (to 423.4M).
---
💵 US Dollar (DXY)
* DXY: Gained +1.3%, pushing from 99.09 up to 100.40.
* Yields: The 2-year Treasury yield edged up to 4.67%, while the 10-year yield briefly tested 5.00% before cooling down to 4.94%. Short-term rate differentials provided strong backing for the greenback.
---
🌍 Major Forex Pairs
* 🇪🇺 EUR/USD: Dropped -1.0% to 1.1474. August Euro-area inflation ticked up to 3.2% YoY, but the hawkish Fed tone reinforced the dollar’s yields advantage over the ECB stance.
* 🇬🇧 GBP/USD: Fell -1.2% to 1.3359. U.K. CPI reached 3.1% YoY, but a cautious Bank of England held rates at 3.75% (in a 6–3 split), allowing dollar strength to dominate.
* 🇯🇵 USD/JPY: Rallied +2.7% up to 157.85 (Yen weakness). Despite the Bank of Japan hiking its policy rate to 1.25% (7–2 vote), the wide U.S.–Japan rate spread continues to weigh heavily on JPY.
---
🥇 Gold
* Spot/Futures: Rose +1.2% overall to $4,425 on Friday (rebounding from midweek dips around $4,332).
* Dynamics: Bullion faced pressure from higher rate expectations post-Fed, but safe-haven flows and a pull-back in long-term yields ultimately sparked a recovery.
---
₿ Bitcoin
* BTC: Finished up +1.0% to $78,030.
* Dynamics: High rate expectations triggered a midweek dip to $75,613 before buyers stepped back in, navigating two-way volatility driven by geopolitical risks and liquidity shifts.
---
📅 What to Watch Next Week
1. US Data: International transactions, new home sales, durable goods orders, and EIA inventory reports.
2. Europe & UK: U.K. public finance data + upcoming ECB & BoE bulletins.
3. Core Themes: Watching if USD momentum holds, whether European inflation keeps central banks squeezed, and if energy markets stabilize.
---
📌 Which market asset are you trading into next week? Drop your thoughts below! 👇