Inflation Angst Returns Amid $100 Oil and Tariffs

Global inflation fears are resurfacing amid rising energy costs and new trade tariffs. Oil prices have broken through $100 a barrel, pushing up costs along global supply chains.

The move has sparked concerns among investors that consumer prices could get out of control. Central bankers are set to make key decisions on interest rates next week, which will weigh heavily on the market.

According to Katharine Neiss, chief European economist at PGIM, 'geopolitics drives the economics.' The renewed energy hit follows a widening of the Middle East conflict that has now spread from the Strait of Hormuz to the Red Sea. US President Donald Trump is considering a 'massive attack' on Iran to push for peace negotiations.

The inflation risks have led to surging global bond yields, with UK gilt yields hitting their longest period of daily closes above 5% in almost two decades. The US 30-year yield has also risen to its highest level since 2007.