In this podcast, Frida Infante and Harry Downie discuss the latest inflation data and breakeven markets across the euro area, the UK and the U.S. in the wake of the U.S.–Iran MOU, the latest FOMC meeting, and easing energy prices—and where they see the key risks and opportunities. This podcast was recorded on 18 June 2026. This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-5329550-0, for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2026 JPMorgan Chase &amp; Co. All rights reserved. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. It is strictly prohibited to use or share without prior written consent from J.P. Morgan any research material received from J.P. Morgan or an authorized third-party (“J.P. Morgan Data”) in any third-party artificial intelligence (“AI”) systems or models when such J.P. Morgan Data is accessible by a third-party.

Global Rates: Inflation Markets in Europe, the UK and the US

At Any Rate

# Full Transcript

**Podcast:** At Any Rate

## Transcript

Hi, and welcome to At Any Rate, J.P. Morgan's global research podcast, where we take a look at some of the drivers behind the biggest trends and themes across fixed income currencies and commodity markets. I'm Frieden Fante from the European Rates Strategy Team, and I'm joined by Harry Downey from our US Rates Strategy Team to discuss inflation and inflation markets in Europe and the US. We are recording this podcast on 18th June, and our comments today are based on our published research available on J.P. Morgan Markets. Let me set the scene.

The big story over the past month has been a meaningful move lower in break-evens across developed markets, reflecting a pocket central banks, a rally in nominal rates, and the drop in energy prices. A lot of this is geopolitical. Over the past weekend, we had news that the US and Iran have agreed on an MOU framework to extend the ceasefire by 60 days and discuss further details to end the war, and that's likely to be signed on the 19th June.

That's clearly a step forward, and front-end oil prices have retraced a big chunk of its move higher. So the obvious question markets are asking is, if energy is rolling over and the ceasefire is holding, is the inflation scare simply over? Have break-evens gone further to fall from here or not? And that's really what Harry and I want to get into today across Europe, the UK, and the US. So, Harry, I want to start with you. We heard from the new chair, Walsh, yesterday. What did it imply for inflation markets?

Thanks, Rita. The meeting was definitely hawkish across the board from a statement, projections, prepared remarks standpoint. And the through line for it all was a commitment to price stability. In fact, it was the only policy goal explicitly mentioned in the shortest statement. In the SEP, the dots also shifted more hawkishly, both from our expectations in the market, with six of the 18 dots looking for two or more hikes through the end of 2026, from no hikes prior.

Finally, in the press conference, chair Walsh mentioned the only area he sees restrictiveness in is housing, which implicitly means that policy is not restrictive now. So, this hawkish read all led nominal rates higher. Now, for break-evens, typically they move higher in line with that move in nominal rates, when the Fed and the market are both reacting to the same firmer incoming data.

But when you have a shift in the reaction function for the Fed, like we saw yesterday, it's actually taken as a tightening signal for break-even markets. And so, it led to lower break-evens and higher real yields, as we saw yesterday. And that's what we're expecting over the near term as well. Over the medium term, Walsh is also looking to re-evaluate how this committee will assess prices, both through two task forces, one focused on inflation, the other focused on data.

One of the interesting comments he made about it was they're not changing the goalpo...

Global Rates: Inflation Markets in Europe, the UK and the US

Transcript

Built for investment professionals

Every day you wait, your competitors are finding
edge in conversations you're not hearing.

Global Rates: Inflation Markets in Europe, the UK and the US

Transcript

Built for investment professionals

Every day you wait, your competitors are findingedge in conversations you're not hearing.

Every day you wait, your competitors are finding
edge in conversations you're not hearing.