The ongoing geopolitical conflict in the Middle East is having a growing impact on the global economy. According to a recent post by the well-known financial account Walter Bloomberg (@DeItaone), the Organization for Economic Cooperation and Development (OECD) has issued a new warning, pointing out that soaring energy costs and uncertainty caused by war are keeping global inflation high and severely limiting the pace of economic recovery.
US inflation rate could reach 4.2%, Fed may delay rate cuts.
The OECD has significantly raised its inflation forecast for this year, predicting that the average inflation rate in G20 countries will reach 4%, with the US inflation rate climbing to 4.2%, far higher than previously forecast. Faced with the resurgence of inflation, central banks around the world are adopting a more cautious approach to monetary policy.
The post points out that in order to combat sticky inflation, the US Federal Reserve (Fed) is currently considering postponing its planned interest rate cuts; while the European Central Bank (ECB) may even resort to tightening measures such as raising interest rates to curb inflation.
The energy crisis has become the biggest stumbling block to the global economy.
Despite benefiting from a strong start to the year, global economic growth is currently barely holding on, but downside risks are rising sharply. The OECD warns that a prolonged disruption to energy supplies due to conflict in the Middle East would further push up global prices and disrupt financial markets. The organization stated bluntly that without this war, the global economic growth outlook would be much more optimistic.
In summary, high energy costs and geopolitical risks have become the biggest concerns in the current market. Investors need to pay close attention to the Federal Reserve's subsequent interest rate decisions, as these will directly affect the capital flow of assets such as Bitcoin and US stocks.
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