Central Banks Confront Inflation Worries That Have Upended Markets
Policymakers from Fed, ECB, others meet for first time since war’s outbreak.
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The world’s top central banks convene this week facing a renewed inflation threat from the war in Iran and the possibility that they’ll be forced to delay interest-rate cuts and in some cases consider hikes.
The message from markets is clear: Investors worried about surging oil prices and a widening US budget deficit have pushed bond yields higher. A gauge of Treasuries has erased its gains for the year. Bets that fully anticipated easier monetary policy in the US have eroded, and traders now are pricing in possible hikes in the UK and euro zone later in the year.