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2026-05-27 13:54:55
[HSBC Private Bank: Middle East Conflict Erases Expectations of Rate Cuts in Developed Markets, Predicts Rate Hikes in the UK and Europe] (1) HSBC Private Bank stated that due to the Middle East conflict, the market has largely canceled its expectations for rate cuts in developed markets in 2026. The bank agrees that the Federal Reserve should remain on hold this year. (2) The UK and Europe are relatively more vulnerable to energy price shocks, which are currently dragging down their economic growth and increasing inflation risks. (3) HSBC Private Bank predicts that the Bank of England will raise interest rates twice (25 basis points each) in 2026, and the European Central Bank will raise rates three times. The bank stated: "The Middle East conflict has pushed up inflation expectations and risk premiums due to greater uncertainty in the outlook."
