Global Economic Briefing: The Weekly Worldview: Oil and the Fed: A complicated dance

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Global Economic Briefing: The Weekly Worldview: Oil and the Fed: A complicated dance

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June 22, 2026 04:01 AM GMT

Morgan Stanley & Co. LLCMGlobal Economic Briefing | North America Seth B Carpenter

Chief Global Economist

The Weekly Worldview: Oil and Seth.Carpenter@morganstanley.comArunima Sinha +1 212 761-0370

Global Economist

Arunima.Sinha@morganstanley.com +1 212 761-4125

the Fed: A complicated dance Morgan Stanley & Co. International plc (DIFC Branch)

Rajeev Sibal

The US-Iran agreement and lower oil should ease inflation and Senior Global Economist

Rajeev.Sibal@morganstanley.com +971 4 709-7201

support growth globally. Markets perceived the FOMC meeting

Morgan Stanley MUFG Securities Co., Ltd.

as a hawkish shift, but if inflation undershoots the Fed’s Chiwoong Lee

forecasts, markets may have priced in too much tightening. Principal Global Economist

Chiwoong.Lee@morganstanleymufg.com +81 3 6836-8920

Morgan Stanley & Co. LLCMLast week’s newsflow was dominated by the US-Iran agreement and the first FOMC Mayank Phadke, CFA

Economist

meeting with Kevin Warsh as Chair. Both have big implications for global markets. Mayank.Phadke@morganstanley.com +1 212 761-1531

The announcement of the US-Iran memorandum of understanding came first, and oil

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prices dropped notably. Front-end rates came down as policy rate hike expectations Priyan Mody

were trimmed, and equities rallied. The Fed meeting was interpreted as a hawkish Economist

Priyan.Mody@morganstanley.com +91 22 6996-1855

shift, implying higher short rates, a flatter curve, and equities softened some.

We have to take the events together, though. Lower oil prices, if sustained, remove a

lot of inflationary pressures in many economies. Greater chances of Fed hikes,