IMF: The Market Has Started Betting on a Fed Rate Hike

Odaily reported that the International Monetary Fund stated that the expected timeline for the Fed's 2% inflation target to return is now the end of 2027, compared to the previous forecast of mid-2027. The market has begun betting on rate hikes, and due to persistent upward inflation risks, the Fed should proceed cautiously in its interest rate policy. It has observed some inflation pass-through effects from U.S. tariff increases, as well as renewed upward pressure on overall inflation from energy prices. Global oil inventories are expected to fall to 7.5 billion barrels in July, the lowest level in five years; before the outbreak of the Iran war, they stood at approximately 8 billion barrels. The Iran war has already suppressed roughly 14 million barrels per day of global oil production. The future trajectory of oil prices will depend on whether the Strait of Hormuz can be reopened. (Jin Shi)