Central Banks Turn Hawkish Amid Energy Crisis Fears

Central banks around the world have taken on a more hawkish tone in response to rising energy costs and persistent inflation pressures. The European Central Bank (ECB) raised interest rates by 25 basis points on Thursday, marking its second hike this year.

The ECB's move came as the International Energy Agency (IEA) warned of an impending global energy crisis due to ongoing tensions in the Middle East. This has prompted major central banks to reassess their monetary policies and consider further rate hikes to combat inflation.

In Australia, the Reserve Bank of Australia (RBA) is expected to hike interest rates again this month, with market expectations tilted towards a 50 basis point increase. The RBA's deputy governor noted that policymakers will debate the case for a hike at their meeting later this month.

The US Federal Reserve's meeting next week is also highly anticipated, with markets pricing in over a 50% chance of a rate hike. Recent economic data, including strong jobs numbers and comments from Fed officials, have shifted the needle towards a more hawkish policy outlook.