Middle‑East Energy Shock Tightens Central Bank Rate Pathways

Middle‑East tensions have pushed oil prices above $100, amplifying global inflation risks as the Fed, BoJ and BoE prepare to unveil their rate decisions.

Oil Prices Surpassing $100 Amplify Inflation Fears

■Last week’s surge pushed oil above $100, potentially raising inflation expectations by 0.3%.

■Central authorities remain focused on price stability while navigating these pressures.

Fed’s 66% Chance of Holding Rates Steady

■The Wednesday meeting is expected to keep the policy rate unchanged at +0.25%.

■Markets anticipate at least one rate hike before year‑end.

■Kevin Warsh’s emphasis on “price stability” will provide clues for September, October, December meetings.

BoJ’s 31‑Year High Rate Decision

■June’s meeting lifted the policy rate to 1%, the highest in 31 years.

■BoJ’s cautious stance keeps the possibility of another rate hike alive for the rest of the year.

■The USD/JPY pair remains near a 40‑year high, raising the prospect of intervention.

BoE’s Likely Rate‑Hold with Year‑End Hike Outlook

■BoE is expected to maintain the current rate, yet markets still price in a rate increase later in the year.

■ECB’s comments on the energy shock indirectly shape BoE’s stance.

New UK Prime Minister’s Industrial Revitalisation Blueprint

■Andy Burnham’s agenda aims to decentralise economic decision‑making and boost local production.

■This strategy could redefine the UK’s long‑term growth trajectory.

Markets will closely monitor the ambiguous impact of the Middle‑East energy shock on inflation. In this environment, the Fed and BoJ’s verbal guidance will be pivotal in shaping the year‑end rate path.