Bloomberg Surveillance · Monday, July 27, 2026
Despite pressure from rising energy prices, central banks, particularly the Federal Reserve, may opt for strong rhetoric rather than immediate action on inflation this week. An analyst suggests that while a hike is possible, the base case remains for no immediate policy change, with central bankers emphasizing their commitment to price stability.
“I think of the four central banks making decisions this week and last week, the FEDI is perhaps the it's unlikely to stick to just talk, although our base case remains that they also do nothing. However, there is a case to hike, and several of the fo MC members have been making it and so it will probably be one of these good family fights that Kevin Wassh has been talking about. But don't balance my base cases. They don't act either on Wednesday, and we get some stern talk about commitment to deliver price stability and being prepared to act.”
“What's your underlying view of inflation out there?”
“Well, first of all, on energy prices, I think what's been happening over the last two weeks that when the strike's resumed and now some instant relief, even though the situation in the Strait hasn't really changed in terms of ability of oil to flow out, what it's telling us is we're unlikely to get meaningful this inflation from energy prices for the foreseeable future. And the sharp decline that we saw in June was probably excessive.”