US EditionBig central banks keep options open as traders suspect war will bring ...
- On Wednesday, the Bank of Canada held its benchmark rate at 2.25% and the U.S. Federal Reserve left short-term rates near 3.6%, while Canadian and U.S. stock markets fell.
- Bank of Canada governor Tiff Macklem warned the energy price surge will almost certainly push inflation higher in the coming months amid Iran's state television threats to attack Gulf energy infrastructure, complicating forecasts in the U.S.-Iran war.
- Markets reacted sharply: the S&P/TSX fell 616.42 points and U.S. benchmarks dropped as May crude was down seven cents US at US$95.46 per barrel and April gold declined US$112 at US$4,896.20 an ounce.
- U.S. Fed officials expect the war will worsen inflation this year while still planning one 2026 rate cut, raising the risk that central banks delay easing, Utarid said.
- Oil disruptions in the Persian Gulf energy industry keep energy risk at the center of inflation forecasts, as Macklem warned the surge will almost certainly push inflation higher in coming months.
33 Articles
33 Articles
Big central banks keep options open amid war fears
Nearly all major developed market central banks kept rates unchanged this week, but emphasised their readiness to act to curb inflation should the energy shock caused by the US-Israeli strikes on Iran drive a broader surge in prices.
Scaled at oil prices, more cautious talks between central banks and the war-related reporters have returned to market a much higher volatility than historical standards
Volatility in Global Markets: Dollar Weakens Amid Bond Pressure
As global central bankers caution that Middle Eastern conflict could spur inflation, the dollar faces a weekly loss and bonds remain under pressure. Varied monetary policies across major economies have raised expectations of policy tightening, while energy markets show volatility with significant impacts on oil and natural gas prices.
The war in the Middle East has put the main central banks of the world on guard, who fear that the rise in energy prices will move strongly to inflation if the conflict continues. For the moment, the monetary authorities have decided to keep interest rates unchanged at their meetings this week, but that can change quickly if the consequences of the attack launched on February 28 by Trump and Netanyahu worsen.
It ends a week of high voltage for the financial markets. To the volatility unleashed by the war in Iran, whose attacks have intensified in recent days, has been added the avalanche of central banks that in recent days have decided on interest rates. In total, ten central banks have held a monetary policy meeting this week with the decision to freeze the price of money as a dominant tonic. Virtually all, except the Reserve Bank of Australia (RBA…
Central banks raise the inflation alarm
Central bankers in major economies are voicing concerns about the risk of inflation stemming from the war in Iran. The US Federal Reserve Chair spoke of an accumulation of shocks — “the tariff shock, the pandemic, and now an energy shock” — that blunts progress on fighting inflation. The European Central Bank warned of a “material impact on near-term inflation.” Officials in Canada, England, and Japan also said they stand ready to act to address…
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