A Bloomberg Economics model for scenario analysis suggests inflation expectations would climb and the next US Federal Reserve move may be a hike not a cut.
Any oil price surge as Iran considers retaliating against US air strikes risks reversing central bank rate cut expectations.
Bloomberg Economics estimates that, in a worst-case outcome of the Strait of Hormuz closing, oil may reach US$130 per barrel and US inflation could hit 4%, a move central banks couldn’t ignore.
