The European Central Bank warned US President Donald Trump’s policies could lead to a financial crisis, as inflation risks grow more urgent.
The bank on Wednesday cited the war with Iran, coupled with Trump’s shifting trade positions that have “become a structural feature of the global environment.”
Europe is bracing for higher prices stemming from the energy shock of the war, and an interest rate hike is “starting to look close to a done deal,” ING analysts wrote.
The oil price spike has “upended the outlook for inflation and interest rates” globally, Reuters wrote.
Indonesia last week raised rates for the first time in two years, British policymakers have warned they could take a similar step, and US Federal Reserve officials are discussing the possibility of rate hikes.