Central banks will face another test
According to Bloomberg Economics, despite the de-escalation of the conflict between the United States and Iran, the effects of the war in the Middle East on global monetary policy will be felt for many more months.
The forecast revision reflects an increase in inflation risk, linked in part to the global technological race in artificial intelligence and the energy shock caused by the closure of the Strait of Hormuz.
Importantly, the projected path of central bank interest rates has clearly .
According to BE team estimates, by 2028 rates will be at least 0,5 percentage points .
At the beginning of the year analysts had forecast that by mid-2027 U.S. rates would be cut by a total of 1 percentage point.
They now predict a cut of only 0,25 percentage points.
As a result, the upper limit of the U.S. federal funds rate, currently 3,75%, will not change until the end of the year but will fall to 3,5% by the end of 2027.
The European Central Bank’s deposit rate will rise from 2,25% to 2,5% by the end of 2026 and shrink to 2% in 2027.
Source: Bloomberg.
Despite the resilience of global economies, they will remain under pressure due to Donald Trump’s policy, which in the past also led to increased market uncertainty.
A key challenge is also the “era” of Kevin Warsh at the Federal Reserve, who – according to reports – plans, among other things, to change the Fed’s communication strategy, including limiting detailed guidance on future monetary policy paths.
Long-time market observers believe this could represent a significant, potentially radical change, bringing both opportunities and risks, and its consequences may also be felt in the context of the U.S. November special elections.
“Inflation and affordability are priorities for many Americans, especially after the war with Iran has driven up energy and other goods prices. Trump still demands lower rates, but only time will tell if the Fed chief he chose can create economic conditions that allow for their reduction,” we read.
At the end of August the Federal Reserve will host its annual symposium in Jackson Hole, which may provide more information on the future direction of monetary policy.
Source: Bloomberg.
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Dollar to zloty on Monday, July 6
The dollar to zloty on Monday, July 6 is at 3,75 PLN.
Chart. Dollar to zloty (USD/PLN)
Source: Trading Economics.
The euro to dollar reaches 1,14 USD.
Chart. Euro to dollar (EUR/USD)
Source: Trading Economics.
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Source: Bloomberg.
