What the Fed meeting on June 16 and 17 means for a systematic investor.
Publication date: June 15, 2026
As of this writing, late Monday afternoon, June 15, the mood on the stock market is celebratory. Wall Street is soaring (the S&P 500 is up about 1.5%, the Nasdaq over 2%) after President Trump announced Sunday evening that the peace deal with Iran has been finalized. Hostilities are ceasing, and the Strait of Hormuz is reopening. As a result, oil prices are falling sharply. In Amsterdam, the picture is more mixed. The AEX is hovering around 1,078 points, just below the record of 1,081 set on Friday. Oil stocks such as Shell and SBM Offshore are actually weighing on the index due to that same lower oil price.
And it is precisely amid this optimistic mood that the Federal Reserve comes into the picture this week. Tomorrow, the two-day interest rate meeting begins in Washington, and the decision will follow on Wednesday evening at 8:00 p.m. (Dutch time). It is the first meeting under new Chairman Kevin Warsh. The market is virtually certain that nothing will change: over 97% of traders expect the interest rate to remain unchanged at 3.50% to 3.75%. Yet the tension is palpable.
Because it is not the decision itself that everyone is waiting for, but the tone. With inflation still hovering around 4.2% and a strong labor market, traders are looking for signs that Warsh might still put an interest rate hike on the table later this year, possibly as early as December. From the prospect of a cut to “higher for longer”: high, and set to remain high for the time being.
What exactly is “higher for longer”?
It’s stock market jargon for a simple idea: interest rates will stay high longer than investors had hoped. Lower interest rates are generally good for stocks. Borrowing money is cheaper and savings yield little return, so capital flows toward the stock market. As soon as the market thinks rate cuts are being delayed, that sentiment shifts.
And look how quickly that sentiment can shift. Less than a week ago, an unexpectedly strong U.S. jobs report fueled fears of interest rate hikes, and the Nasdaq lost over 4% in a single day. Today, just a few days later, euphoria over the Iran deal is prevailing, and U.S. stock markets are trading significantly higher. Two completely different market sentiments in less than a week, and the Fed’s tone could easily flip things again on Wednesday.
The problem for those who invest based on gut feeling: no one knows in advance which way it will go. And the market can turn on a dime during a single press conference.
At Systems2follow, our investors don’t trade based on the tone of a press conference, but through systems with fixed rules. That makes an interest rate decision less nerve-wracking than it seems.
A system knows no panic and no euphoria. It executes its rules, whether the Fed hints at hikes or not.
Market-neutral strategies are designed to pursue returns regardless of the market’s direction, especially around an interest rate decision, when that direction can flip within a day.
Diversifying across systems and markets ensures you are not dependent on a single scenario. For example, in recent weeks, the uncertainty surrounding U.S. interest rates was offset by a record-breaking run in Amsterdam, and while Wall Street is celebrating the agreement with Iran today, Amsterdam is actually losing ground slightly due to the drop in oil prices.
An interest rate decision is therefore no reason to change your approach. Rather, it illustrates why a systematic approach exists: not to predict what the Fed will say tomorrow, but to ensure that you don’t have to predict it.
Curious about what a combination of systems might look like for your situation, even in an environment where interest rates remain high for longer?
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