Middle East tensions and disrupted Gulf shipping routes have pushed oil prices above $100 a barrel, prompting major central banks worldwide to reconsider interest rate cuts planned for 2026 and potentially raise rates instead. The energy shock threatens to create stagflation—higher prices combined with slower economic growth—forcing central banks to reassess inflation risks similar to the 2022 energy crisis following Russia's invasion of Ukraine.
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Middle East tensions and disrupted Gulf shipping routes have pushed oil prices above $100 a barrel, prompting major central banks worldwide to reconsider interest rate cuts planned for 2026 and potentially raise rates instead. The energy shock threatens to create stagflation—higher prices combined with slower economic growth—forcing central banks to reassess inflation risks similar to the 2022 energy crisis following Russia's invasion of Ukraine.