The conflict between the United States and Iran may have ended with a ceasefire that is still holding for now, but its impact on the world economy is expected to be long-lasting.
According to Bloomberg Economics, the conflict has changed expectations about the direction of global interest rates, with central banks expected to keep interest rates higher until at least 2028.
Before the conflict broke out, many analysts expected central banks to cut interest rates to support economic growth.
However, rising energy prices due to oil supply disruptions after the closure of the Strait of Hormuz have increased inflationary pressures.
In addition, the growing demand for artificial intelligence (AI) technology also has the potential to maintain price pressures in the economy.
This situation means that consumers and businesses may have to face higher borrowing costs for a longer period. Home loans, business financing and various types of credit are expected to remain more expensive than previously expected.
For example, the US Federal Reserve (Fed) is now expected to cut interest rates more slowly, while the European Central Bank may raise interest rates further before starting to ease its monetary policy.
Although interest rates are expected to remain high, Bloomberg Economics believes the global economy is still resilient for now.
This shows that businesses and consumers are increasingly able to adjust to higher financing costs despite various economic challenges.
However, uncertainty remains high. Changing economic and geopolitical policies, including the steps of President Donald Trump's administration on trade and international conflicts, could continue to put pressure on the world economy.
Therefore, central banks are expected to remain cautious in determining interest rate policies to ensure that inflation is under control without unduly affecting economic growth.
