Global central banks signal shocking shift on interest-rate bets

Central Banks' Interest Rate Decisions - Global central banks are shifting towards interest-rate hikes due to rising oil prices driven by the Iran War, prompting a reevaluation of earlier plans for rate cuts in 2026 [1] - The Federal Reserve, European Central Bank (ECB), and Bank of England (BoE) held interest rates steady recently, with concerns about inflation risks stemming from the Iran War [2][3] Economic Impact and Forecasts - Major brokerages, including Barclays and J.P. Morgan, anticipate that the ECB will raise interest rates as early as April, with further increases expected in June and July [4][5] - Goldman Sachs predicts a cumulative 75 basis-point hike in the ECB's rates, starting with 25 basis-point increases from June, citing upward pressure on energy prices [6] Inflation Concerns - The BoE has indicated that inflation could exceed its 2% target by 2026, leading to a shift in expectations regarding interest rate changes [9][10] - Analysts note that the BoE's decision to hold rates at 3.75% reflects a response to new economic shocks, with policymakers assessing the situation as it unfolds [9]