During trading on June 18, 2025, investors showed increased caution. The main reasons are the escalation of conflict between Israel and Iran and discussions of possible US military intervention. Markets react sensitively to geopolitical risks, boosting demand for safe-haven assets.
Central banks, particularly the US Federal Reserve, decided to hold the key rate steady, demonstrating restraint amid inflationary pressure and overall economic uncertainty. Experts warn: challenging months lie ahead for the global financial system.
Safe-Haven Demand and Energy Pressures
The US dollar strengthened: the dollar index rose by 0.11% as investors sought stable currencies amid rising tensions. At the same time, risk currencies like the Australian dollar and the Korean won weakened.
Oil prices remain vulnerable. Brent is trading around $76.5 per barrel. Analysts at Goldman Sachs note that the geopolitical premium could be as high as $10, potentially pushing prices to $90 in case of escalation. Shell has warned about shipping disruptions in the Strait of Hormuz, intensifying concerns about energy supplies.
Central Banks Remain Cautious
The US Federal Reserve maintained its key rate at 4.25–4.50%, but signaled a possible cut by year-end. Fed Chair Jerome Powell emphasized that inflation remains a “significant risk” and that the bank will be guided strictly by economic indicators.
In Europe and Asia, sentiment is similar: regulators are acting cautiously. Markets await updated monetary policy projections. Analysts stress that central bank decisions will largely depend on energy price dynamics and investor behavior if tensions escalate further in the Middle East.
As of June 19, 2025, markets remain under pressure from geopolitical instability. Central banks are acting cautiously, and investors prefer safe-haven assets. The future trajectory will depend on developments in the Middle East and inflation trends in leading global economies.
