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Global Financial Markets

Interest rates set to rise significantly in the long term

Thursday, 16 July 2026, written by Edward Markus

The tightness in the market for oil products (diesel, petrol) is greater than the prices of Brent and WTI would suggest. This also means that the inflationary risks associated with a closure of the Strait of Hormuz are greater, and this, in turn, will play a major role in central banks’ interest rate policy. In this report, we explain why this is the case and what it means for key interest rates, exchange rates and equity prices. 

This report is published: Bi-weekly

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Previous reports

Inflation, stagflation or deflation

Thursday, 02 July 2026

It is striking how differently economists and analysts view the implications of the Iran deal and the rise of AI for economic growth and inflation. If we look at the charts for gold, the yield curve, the S&P 500 and the dollar index, the markets’ expectations are quite clear. In this report, we examine what these market expectations are, how we view them, what role China’s rise plays in this context, and what this means for key interest rates and exchange rates.
 

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Oil prices fall, but the risk of inflation remains

Thursday, 18 June 2026

Following the deal between Iran and the US, energy prices have fallen and a major risk factor is now behind investors. Does this clear the way for falling inflation and further rising share prices, or will the Fed put new obstacles in the way in the form of higher interest rates?

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Is AI a bubble?

Thursday, 04 June 2026

Expectations regarding the positive impact of AI on the economy and profits are running high. Rightly so, but the share prices of AI-related companies have risen so sharply that the risk of disappointment regarding the profitability of AI investments has increased significantly. For the time being, we believe that developments in this area and what happens in the Strait of Hormuz will be decisive factors for the financial markets.

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Eddy's Weekly Market Insight

Wednesday, 15 July 2026

Eddy's Weekly Market Insight

What's Driving the Markets? President Trump's approval ratings are hovering near historic lows. This appears to have prompted a more confrontational stance on several geopolitical issues. Trump has declared the ceasefire agreement with Iran void. At the same time, tensions within NATO are becoming increasingly visible. Trump has expressed strong dissatisfaction with Europe's failure to support the United States during the conflict in the Middle East and with Spain's unwillingness to increase defence spending. In addition, the potential annexation of Greenland by the United States has once again returned to the political agenda. With respect to developments in the Middle East, our base case is...
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— Edward Markus, Founder & Chief Economist