Think Ahead: Deal Done, Hikes Axed?

While a potential US-Iran deal may reopen the Strait of Hormuz, ING argues that central banks like the ECB and Fed will likely maintain their hawkish stance in June due to lingering supply chain impacts and the need for policy credibility.

Key Takeaways

• 1.A potential US-Iran deal and the reopening of the Strait of Hormuz may not provide the immediate relief to energy prices that markets expect due to low global reserves and infrastructure repair needs.
• 2.Central banks, particularly the ECB, are likely to proceed with signaled rate hikes in June to maintain credibility, despite geopolitical developments.
• 3.Economic growth is becoming increasingly vulnerable, with European PMIs and US disposable incomes showing signs of strain, limiting the potential for a multi-year inflation shock.

Table of Contents

• Deal done, hikes axed? Not exactly
• ING's scenarios for oil prices
• THINK Ahead in developed markets
• THINK Ahead in Central and Eastern Europe
• Key events in developed markets
• Key events in Central and Eastern Europe

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