PremiumCBs Should Be Pre-Emptively Hiking Rates As HSBC Fears Enduring Effects Of Supply Shocks On Inflation/Growth
"A stitch in time..." is the title of a new must-read report from HSBC's Global Economics Team (available here for pro subs) arguing that the economic fallout from the US-Iran conflict - which began nearly 12 weeks earlier and led to the effective closure of the Strait of Hormuz (the largest disruption to global oil supply on record) - will mean more central banks are set to raise rates as the supply shocks will have enduring effects on inflation and growth.
“Even if the Strait re-opens swiftly, the risk of supply shocks and the impact on global inflation and growth will endure.
So we now forecast that more central banks will raise policy rates, even in the event of a near-term peace deal.”