Economist: US-Iran Agreement Reduces Recession Risk, But Does Not Change Outlook Expectations

Odaily Odaily According to a report by Oxford Economics' Ben May and Bridget Payne, while future setbacks remain possible, the US-Iran agreement reduces the risk of a sustained decline in oil inventories that could ultimately trigger a surge in global energy prices and lead to a recession. However, they noted that this does not automatically mean the volume of oil flowing through the Strait of Hormuz will increase faster than previously expected. "We had already assumed that shipping through the Strait of Hormuz would resume by the end of July."

"Nevertheless, our current short-term oil price forecasts still appear to be on the high side." They added that since the reopening of the Strait of Hormuz is likely to help reduce inflation but has a limited boost to economic growth, this news further reinforces their view that the Federal Reserve and the Bank of England will not raise interest rates, and that other central banks which have already completed their rate hikes will not do so again. (Jinshi Data)