Tailwinds from lower oil, headwinds from front-end rates uncertainty

Research evidence excerpt

Tailwinds from lower oil, headwinds from front-end rates uncertainty

Portfolio Strategy Research

22 June 2026 | 9:23PM BST

GOAL KICKSTART

Last week markets were caught between central banks breakevens on the back of lower energy prices, front-end Christian

Mueller-Glissmann, CFAmeetings and the ongoing US-Iran negotiations, with a MoU nominal yields remain elevated with 2-year real yields near +44(20)7774-1714 | christian.mueller-

glissmann@gs.com

signed last Wednesday. In response to our commodity their highest level since October 2024 (Exhibit 2). Equity Goldman Sachs International

strategists’ lower forecast for Brent crude oil prices our markets historically digest higher yields when they reflect a Alessandro Giglio

+44(20)7051-6240 |

economists have lowered their US 12m recession probability friendly growth/inflation/policy mix, but struggle when alessandro.giglio@gs.com

Goldman Sachs International

to 15% (from 25%). In his first meeting, the Fed Chair Kevin higher rates are fast and associated with a more restrictive

Andrea Ferrario

Warsh held the benchmark rate steady at 3.50–3.75% but policy path. The Nasdaq/S&P 500 ratio has moved higher +44(20)7552-4353 |

andrea.ferrario@gs.com

delivered a hawkish surprise driving the broad Dollar Index despite rising real yields (Exhibit 3), suggesting that Goldman Sachs International

to a one-year high (100.7). Outside the Fed, the ECB hiked AI-related earnings optimism and capex spending have Giovanni Ferrannini

+44(20)7051-2589 |

policy rates by 25bp as widely expected, while the BoE held offset the traditional valuation headwinds. However, with giovanni.ferrannini@gs.com

at 3.75%. Looking ahead, the US Core PCE release on higher real yields and a stronger Dollar Gold has sold off -

Elena Porfidia