HSBC Predicts More Central Banks to Raise Rates Despite Potential U.S.-Iran Peace Deal

According to a HSBC report published on May 19, economists Janet Henry and Besson Ellis predicted that more central banks would raise rates even if the U.S. and Iran reach a peace agreement in the near term. The bank noted that supply shock risks and their impact on global inflation and growth would persist even if the Strait of Hormuz rapidly reopens. HSBC expects the Australian Reserve Bank, Norway’s central bank, and others to continue tightening policy, with the European Central Bank and Bank of England likely to begin rate hikes in June or July, followed by emerging market central banks if the Federal Reserve raises rates.