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Global interest rates face new inflation shock era
The global interest rate outlook is being rapidly reshaped by a new wave of inflationary pressures, as policymakers and financial leaders warn that the economic fallout from the Iran war could mark the beginning of a more volatile and prolonged period of elevated borrowing costs. What had been a gradual path towards lower inflation and policy normalisation has been disrupted by surging energy prices, supply chain fragmentation and rising geopolitical tensions. Together, these forces are raising the prospect that interest rates will remain higher for longer, and may even face further upward shocks.Central banks brace for repeated inflation shocksWarnings from policymakers suggest inflation is no longer a one-cycle problem. In a recent address, Chicago Federal Reserve President Austan Goolsbee cautioned that economies could face successive inflationary shocks rather than a smooth return to price stability. "The prices spiked from tariffs and they were supposed to go away, and this is now hitting before that went away," Goolsbee said at the Detroit Economic Club. "The possibility of a stagflationary outbreak coming from high oil prices before the tariff inflation went away, leading ⁠to the main engine of growth - the
Outlook
Bessent says US economic growth may slow
United States Treasury Secretary Scott Bessent said the economy will be slower this quarter due to the war in Iran, but it is in good shape to rebound. In an interview with CNBC, Bessent said while oil prices have risen, he doesn’t expect the war to greatly impact inflation. He also said he expects gas prices to decline. “I think the gas prices will start coming down pretty quickly,” he said. “We’ve had the big declines in the past two weeks.” This comes as average gas prices decrease across the U.S., despite remaining significantly higher than before the war in Iran started and the Strait of Hormuz was blocked. While economic growth is expected to be slower in the next quarter, Bessent said the U.S. economy was strong enough in the first quarter that it shouldn’t be a major issue. “We’ve heard the president say that one of the reasons he believed that he was able to prosecute this war now and you know other than he believed it was the right time to prevent Iran from having a long-term nuclear weapon, and to decapitate the regime was that the economy was in such good shape,” he said. While Bessent said he doesn’t know when the war is going to end, he told the BBC that he was less concerned about the economi
Outlook
World Bank readies US$100bn war aid
The Washington D.C.-based World Bank could mobilise between US$80 billion and $100 billion in financing over the next 15 months to support countries hit hardest by the war in the Middle East, outlining a response that would exceed the institution’s $70 billion deployment during the covid crisis. Proposed funding, announced on the sidelines of the spring meetings of the International Monetary Fund and World Bank, reflects a rapid escalation in concern among global economic institutions over the war’s widening impact on growth, inflation and financial stability. Early projections indicate the shock is already feeding through energy markets and fiscal balances, particularly in developing economies. The bank’s president, Ajay Banga, told the market yesterday that $20 billion to $25 billion could be made available in coming months, allowing countries to draw down up to 10% of previously approved programme funds ahead of schedule. An additional $30 billion to $40 billion could be generated within six months by repurposing existing programmes. Additional financing will require the use of the bank’s balance sheet capacity if the conflict persists. “I’m trying to create a toolkit that has a tiered response capacity,” Bang
Outlook
Fed signals rate cut despite geopolitical uncertainty
Minutes from the Federal Reserve’s March policy meeting released on Wednesday (Thursday AEST) indicate officials still expect to lower interest rates this year, even as uncertainty linked to geopolitical tensions and trade policy clouds the economic outlook. Members of the rate-setting Federal Open Market Committee acknowledged that the ongoing conflict involving Iran and rising tariffs could complicate the path for monetary policy, particularly if higher energy costs begin to weigh on households and employment. Most participants suggested that escalating fuel prices could ultimately justify a more accommodative stance if they materially impact consumer spending and labour market conditions. Policymakers emphasised the need to remain “nimble” as they assess how these dynamics influence inflation, which continues to run above the central bank’s 2% target, and employment growth, which has remained largely stagnant over the past year. “Many participants judged that, in time, it would likely become appropriate to lower the target range for the federal funds rate if inflation were to decline in line with their expectations,” the minutes said. The committee’s central expectation remained for one rate cut in 2026, unchange
Outlook
JPMorgan's Dimon on playing President and arming America
If you want to understand the true intersection of high finance and Washington, look no further than Jamie Dimon’s 2026 annual letter to shareholders. As has become tradition, the banking giant's chief executive treats his yearly dispatch less like a corporate financial update and more like a sweeping State of the Union address. This year, however, the tone is uniquely sharp and undeniably defensive. Dimon is staring down a volatile mix of global warfare, shifting critical mineral supply chains, and a bloated United States deficit. In response, he has unleashed some of his most pointed criticisms yet against the regulatory state, while firmly planting his institution squarely in the middle of the military-industrial complex.The regulatory tiradeDimon has never been shy about his disdain for government overreach, but in 2026, the gloves are fully off. While he acknowledges that the U.S. economy has remained remarkably resilient, he is quick to caveat that this strength is largely a sugar high fueled by massive government deficit spending. His real venom, however, is reserved for financial watchdogs. He explicitly targets the proposed Global Systemically Important Bank (GSIB) capital surcharge, arguing it aggressively

Outlook
IMF cuts growth outlook as Iran war disrupts oil
The war in the Middle East has triggered a global economic shock that will push up inflation and slow growth, the head of the International Monetary Fund (IMF) warned, as energy disruptions ripple through supply chains and financial markets ahead of updated forecasts. In an interview with Reuters, IMF managing director Kristalina Georgieva said the conflict had already forced the Fund to abandon expectations of a modest upgrade to global growth, replacing it with a downgrade and a higher inflation outlook. The IMF is set to release revised projections in its forthcoming World Economic Outlook on 14 April. The warning reflects a rapid reassessment of global conditions following what the IMF describes as the largest disruption to energy supply in modern history. Iran’s effective closure of the Strait of Hormuz - through which one-fifth of global oil and gas flows - has cut global oil supply by an estimated 13%, sending benchmark Brent crude prices towards US$110 a barrel and raising costs across transport, manufacturing and agriculture. The IMF had previously projected global growth of 3.3% in 2026 and 3.2% in 2027, reflecting a gradual recovery from the pandemic and tightening monetary policy. That baseline has no
Outlook
Rising AI investment clashes with US consumer concern
Most Americans believe artificial intelligence (AI) will do more harm than good in their daily lives, with concern rising sharply even as adoption accelerates and companies commit hundreds of billions of dollars to the technology. According to a new Quinnipiac University poll, 55% of respondents expect AI to have a negative net impact on their day-to-day lives, up 11 percentage points from April 2025, while 70% believe advances in AI are likely to reduce job opportunities. Surprisingly, only 7% expect the technology to create more jobs.Widening gapOverall, the findings, based on a mid-March survey of 1,397 adults, reveal a widening gap between rapid technological deployment and public confidence. A notable souring of sentiment toward AI coincides with major technology firms ramping up their investment in the infrastructure on which AI operates. Amazon, Meta, Google and Microsoft are collectively expected to spend around US$650 billion on AI-related infrastructure in 2026, positioning the sector as a central driver of U.S. economic growth. Meantime, political spending tied to AI policy is also on the rise. Venture capitalist Marc Andreessen and Greg Brockman have contributed tens of millions of dollars to U.S. mid
Outlook
OECD lifts US inflation outlook
The Organisation for Economic Co-operation and Development (OECD) has sharply lifted its inflation forecast for the United States, warning that conflict in the Middle East and persistent trade pressures will keep price growth well above central bank expectations through 2026. In its latest interim outlook, the Paris-based body projected U.S. headline inflation will reach 4.2% in 2026, up from a previous estimate of 2.8% and significantly higher than the 2.7% forecast published last week by the Federal Reserve (the Fed). The revision underscores the growing divergence between international assessments of inflation risks and the Fed’s baseline scenario. The OECD attributed the upward revision primarily to energy market disruption stemming from the Iran conflict and the residual effects of U.S. tariffs, which continue to feed into global prices. In its report, the organisation said a prolonged period of elevated energy costs would “add markedly to business costs and raise consumer price inflation, with adverse consequences for growth”. A key transmission channel is the disruption to shipments through the Strait of Hormuz, a critical artery for global oil and gas flows. The OECD warned that any sustained closure coul
Outlook
AI boom could worsen wealth inequality: BlackRock CEO
The artificial intelligence boom could worsen wealth inequality unless more people can share its gains, BlackRock CEO Larry Fink said in a letter to shareholders. Fink encouraged broader participation in investment, saying that this could help distribute market gains from technologies like AI. “The vast majority of wealth has flowed to people who owned assets, not to people who earned most of their money by working,” Fink wrote. “Now AI threatens to repeat that pattern at an even larger scale—concentrating wealth among the companies and investors positioned to capture it.” In the letter, Fink said that providing children with investment accounts at birth could aid in wealth-building and allow more people to invest. The United States has begun offering these early wealth-building accounts for children born between 2025 and 2028, with the Treasury Department saying almost 3.5 million accounts had been opened by 6 March. “We’ll see how these accounts evolve, but if they are structured thoughtfully, and paired with existing investment vehicles for education and retirement (like 529 and 401(k) plans), this could be a very significant step toward more young Americans growing with their country,” wrote Fink. Skilled tra