Fed, BoE, BoJ Meet Amid Rising Tensions and Oil Prices
The US imposed new tariffs on imports from 60 economies due to forced-labour allegations. The rates range from 10% for countries like the UK, India, and EU to 12.5% for Japan, Korea, and China. Generic drugs face a 100% tariff within two years.
The US-Iran conflict extended, with Houthi rebels attacking Saudi oil tankers and declaring a blockade of Saudi ports. Brent crude surged above $100 a barrel for the first time since May, while US ten-year Treasury yields rose above 4.7%, the highest since January 2025.
The European Central Bank left interest rates unchanged, in line with expectations. President Lagarde warned that the full effects of the energy shock have yet to play out, keeping a September hike alive. Markets price a 70% hike probability for next month.