Global Growth Resilient Amid Persistent Inflation and Geopolitical Risks, Central Banks Adopt Hawkish Stance

Global economic growth remains resilient but uneven, with persistent inflationary pressures and geopolitical risks, including the winding down of the Iran war, shaping the economic outlook. Central banks globally are adopting a more hawkish monetary policy stance in response to these factors. Oil prices have retraced 80-85% of their war-driven spike, which is expected to lead to a near-term pullback in headline inflation. However, AI-related forces are simultaneously supporting investment and demand while fueling inflationary pressures in parts of the global supply chain. The European Central Bank has already raised rates, while the Federal Reserve is closely monitoring inflation.