<p><strong>GLOBAL: </strong>The US Federal Reserve (Fed) held its policy rate steady at 3.50-3.75% following its June monetary policy meeting, as inflation shows signs of cooling but remains a lingering concern for policymakers.&nbsp;</p>

<p><strong>Market impact: </strong>The S&amp;P 500 retreated, Treasury yields advanced, and the dollar appreciated as markets priced in a policy rate hike by September.&nbsp;</p>

<p><strong>Metrobank anticipates the Fed to maintain its current policy rate through the end of the year,</strong> balancing persistent inflationary pressures against resilient economic growth.&nbsp;</p>

<p><strong>LOCAL: </strong>Macroeconomic think tank Oxford Economics said the central bank will likely need to deliver further policy rate hikes to successfully anchor inflation expectations.&nbsp;</p>

<p><strong>Market impact: </strong>The PSEi retreated to the 6,100 level ahead of the BSP’s June monetary policy meeting. The peso depreciated to PHP 60.393 against the US dollar as market participants awaited further details regarding the US-Iran peace agreement.&nbsp;</p>

<p><strong>Metrobank forecasts continued monetary policy tightening from the BSP, </strong>with the policy rate potentially reaching 5.25% by year-end, driven by expectations that headline inflation will persistently breach the 2-4% target range.&nbsp;</p>