No silver bullet for doves

This week on Currency Exchange, the team discusses the market implications of the first Federal Reserve meeting under Chair Kevin Warsh, the outlook for the US dollar following a hawkish shift in Fed expectations, the Bank of Japan’s widely anticipated rate hike, and growing concerns about potential Japanese FX intervention.Key takeaways* The first Fed meeting under Kevin Warsh was interpreted as hawkish, largely because Warsh declined to counterbalance a more hawkish committee message. * The FOMC dot plot surprised markets, with half of participating members projecting rate hikes in 2026 and several favouring multiple increases.* NatWest no longer expects Fed rate cuts this year, providing near-term support for the US dollar, although markets may still be overpricing tightening risks.* The Bank of Japan’s rate hike to 1.0% was fully anticipated and had little market impact, partly due to Governor Ueda’s absence and limited forward guidance.* Japanese intervention risks remain elevated as USD/JPY stays near multi-decade highs, but Japan’s accommodative fiscal and monetary policy mix continues to argue for underlying yen weakness. Host: Eimear Daly (Emerging Markets Macro Strategist)Guest: Brian Daingerfield (Co-Head of G10 FX Strategy) You can also find this episode of Currency Exchange on Spotify and Apple Podcasts.This episode was recorded on 18 June 2026.For any terms used please refer to this glossary https://www.natwest.com/corporates/insights/markets/glossary.htmlPlease view our full disclaimer here: https://www.natwest.com/corporates/disclaimer.html