TechFlow News, April 7: Analysts at First Abu Dhabi Bank stated in a report that the strength of oil prices has been—and will continue to be, at least in the short term—a more structural driver of inflationary pressure. The analysts noted that such inflationary pressures have triggered a sell-off in interest rates amid fading market expectations for central bank rate cuts. Earlier, markets had anticipated two or three Federal Reserve rate cuts this year, but those expectations have now been fully priced out. LSEG data shows that money markets currently expect U.S. policy rates to remain largely unchanged through 2026, with only a very slight bias toward tightening. Markets have even priced in more hawkish rate hikes by the European Central Bank and the Bank of England by year-end—74 basis points and 56 basis points respectively—“largely driven by imported energy inflation in Europe.” (Jinshi)
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