Fed Hawkishness Displaces Hormuz Noise as the Dominant Market Risk

Global markets are entering the week of June 22 with a clearer pecking order of risk. The Strait of Hormuz and Trump’s war is no longer the dominant driver; the Federal Reserve is.

After months of whipsaw headlines from the US-Iran conflict, traders have largely stopped flinching at each new diplomatic twist. The bigger force repricing oil, gold, stocks, and Bitcoin (BTC) is Fed Chair Kevin Warsh’s hawkish debut at the June 17 FOMC meeting.

Oil Deflates as War Premium Fades

Brent crude settled around $80 on Friday, June 19, after US-Iran talks were abruptly called off, yet the reaction was muted. WTI traded near $76, down roughly 34% from conflict highs.

Three Saudi supertankers carrying roughly six million barrels transited the strait last week. Tanker owners report cautious but growing confidence in the waterway. The war premium that once consumed markets is unwinding, even without a signed peace deal.

Warsh Reframes Gold and Stocks

Gold fell to around $4,150 per ounce on Friday, as the dollar climbed to a one-year high. The driver was not geopolitics but the Warsh hawkish FOMC shift, where nine of 18 officials now project at least one rate hike in 2026.

Goldman Sachs cut its year-end gold target to $4,900 from $5,400. US equities held up better, with the S&P 500 recovering from Fed-day losses, closing its 11th winning week in 12.

The S&P 500 has been climbing since the first mention of peace back in April. This is despite the back-and-forth and uncertainty around the conflict. Image Source: Trading View

Bitcoin Caught Between Two Headwinds

BTC trades near $64,000, holding above recent lows but unable to build meaningful momentum. As BeInCrypto reported, Warsh’s press conference sent Bitcoin lower alongside gold, with rate hike odds now at 66% squeezing liquidity expectations that had supported risk assets earlier in the year.

Bitcoin is trading nearly 50% below its October 2025 all-time high of $126,198. The week ahead brings US GDP and PCE data, two readings that will either reinforce Warsh’s hawkish lean or give Bitcoin price a brief reprieve.

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