Analyst: Rising oil prices may become a more structural driver of inflation

SmartContractAuditor · 2026-04-07T08:56:16+00:00

Abu Dhabi First Bank analysts stated that the sustained strength in oil prices will continue to drive inflationary pressures, affecting central bank interest rate expectations. The market has already priced out expectations of Federal Reserve rate cuts, and it is expected that the U.S. policy rate will remain unchanged in 2026, with the European Central Bank and the Bank of England expected to raise interest rates.

SmartContractAuditor

2026-04-07 08:56:16

Abstract generation in progress

Odaily Planet Daily reports: An analyst at Abu Dhabi First Bank said in a report that the strength of oil prices has already, and will continue (at least in the short term), to be a more structural driver of inflation pressure. The analyst noted that inflation pressure has led to a sell-off in interest rates even as expectations for central bank rate cuts fade. Previously, the market expected the Federal Reserve to cut rates two to three times this year, but those expectations have been ruled out. LSEG data shows that money markets currently expect the U.S. policy rate in 2026 to remain largely unchanged, with only a very slight bias toward tightening. The market has even priced in a more hawkish rate-hike scenario by the European Central Bank and the Bank of England by the end of this year, with hikes of 74 basis points and 56 basis points, respectively. “To a large extent, this is the result of Europe’s imported energy-driven inflation.” (Jin Shi)

View Original

This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.

2 Likes