Markets Eye Fed as Trump Pushes Russia – Ukraine Summit Plan

Global markets began the week in a cautiously optimistic mood after Donald Trump urged Vladimir Putin to move forward with a direct summit with Ukrainian President Volodymyr Zelenskiy. The proposal, discussed after Trump’s White House meetings with Zelenskiy and European leaders, calls for one on one talks between Russia and Ukraine, followed by a trilateral meeting with the US. The move underscores Washington’s bid to accelerate a peace process in a conflict that has stretched into its fourth year.

For investors, the immediate market impact has been muted. Risk sentiment held steady as geopolitical volatility failed to materialize, leaving traders focused on the week’s defining event: the Federal Reserve’s annual Economic Policy Symposium at Jackson Hole. The gathering, beginning Thursday, is expected to deliver critical guidance on the path of interest rates and the Fed’s long-term policy framework.

Attention will center on Chair Jerome Powell, who is expected to outline the central bank’s strategy to balance inflation and labor market risks. Market pricing reflects a high degree of conviction in easing: swaps now imply an 80% probability of a 25-basis-point cut in September, with two reductions fully priced in by year end. The prevailing view is that signs of labor market softness are likely to outweigh lingering inflation pressures in the Fed’s debate.

If progress is made on peace negotiations, Europe stands to be the near-term beneficiary, with energy markets potentially seeing downside risks as geopolitical risk premiums fade. A de-escalation in Ukraine would likely weigh on oil prices while giving equities and risk assets room to focus squarely on monetary policy shifts.

With geopolitical tensions temporarily sidelined, the spotlight now falls on Jackson Hole. Powell’s remarks will be decisive for rate expectations into September. Traders should position for heightened volatility across Treasuries, the dollar, and global risk assets as markets recalibrate to the Fed’s policy signals.

Disclaimer: This report is for informational purposes only. It does not constitute investment advice or represent the official views of any central bank or regulatory body.