Central Banks Bracing for Impact of $100 Oil on Inflation

The global central banks are expressing concern over the increasing oil prices, which have reached about $100 a barrel. The Federal Reserve and its counterparts at the Bank of England and Bank of Japan may display varying levels of vigilance in response to the prospect of energy-driven inflation.

According to Madhavi Arora of Emkay Global, 'Brent's rebound is no longer driven solely by the well-known risks around SoH and the latest Red Sea blockade, which threaten up to 4 mbpd of redirected Saudi crude exports.'

The European Central Bank has signaled its readiness to hike interest rates again, and investors are betting on possible rate hikes as soon as September. However, economists are less sure about this prediction.