0704 GMT - A week of central bank decisions is wrapping up with one clear conclusion: the Middle East conflict is intensifying, and no one knows what the right monetary policy response should be, says Ipek Ozkardeskaya at Swissquote. The message echoed by major central banks is that rising oil and energy prices will push inflation higher in the short to medium term, depending on how long the conflict lasts, while weighing on growth. The challenge is that raising rates in response to an external supply shock is only partially effective, she says in a note. It won't end the war, fix damaged infrastructure, or directly lower energy prices, the analyst writes. What rate hikes can do is curb growth and dampen demand, helping to contain, but not necessarily reverse, inflationary pressures. (fabiana.negrinochoa@wsj.com)
(END) Dow Jones Newswires
March 20, 2026 03:04 ET (07:04 GMT)
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