U.S.-Iran Deal Lowers Recession Risk on June 15, But Oil Price Outlook Unchanged

According to Oxford Economics, a U.S.-Iran deal announced on June 15 has lowered the risk of a global economic recession triggered by a sharp surge in energy prices, as reported by Jin10. Analysts Ben May and Bridget Payne stated that while the agreement reduces the risk of prolonged oil inventory depletion, it does not automatically accelerate crude flows through the Strait of Hormuz beyond prior expectations. "We already assumed shipping through the Strait of Hormuz would resume by end-July," they noted, adding that "our current near-term oil price forecasts still appear too high." The economists reinforced their view that the Federal Reserve and Bank of England will not raise interest rates, and other central banks that have already tightened will not hike again, as the deal's benefit to inflation control is limited in supporting economic growth.
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