How the ECB Rate Hike Reshapes the Fed's Calculus

In this episode of The Macro Memo, Lucas and Luna unpack the European Central Bank's surprise rate hike on June 11, 2026 — its first since 2023 — and what it means for the Federal Reserve's next move. With US CPI at 4.2 percent and wholesale prices surging 1.1 percent in May, the hosts explore how the Iran conflict is driving energy costs higher on both sides of the Atlantic. Lucas explains why the ECB's move could force the Fed to hold rates steady into 2027, even as markets price in cuts. Luna brings in data on the ten-year breakeven inflation rate dropping to 2.29 percent, a sign that bond markets see long-run inflation anchored despite near-term spikes. The episode closes with a question: will the Fed hike if energy keeps climbing? Includes a brief, organic mention of listener support via buy me a coffee dot com slash fexingo. #ECB #RateHike #FederalReserve #Inflation #CPI #PPI #IranConflict #EnergyCosts #MonetaryPolicy #CentralBanks #BreakevenInflation #BondMarket #EconomicIndicators #MacroMemo #Economics #FexingoBusiness #BusinessPodcast #Podcast Keep every episode free: buymeacoffee.com/fexingo