ECB, Fed, and Inflation Risks from Oil Shock (with Tom, Anna, Lizzie)

Yields cautious up , medium term, interviewee explicit

explicit

NDX

RUT

Oil up , short term, interviewee explicit

explicit

Metals

USD

HSBC 8.0
Investment Bank $1686.00B
Janet Henry 8.5

ECB, Fed, and Inflation Risks from Oil Shock (with Tom, Anna, Lizzie)

wti

We've got $80 as the average for 2026... it is based on the assumption that the next month is when you get the highest level of oil prices.

5 calls

-5

no reliable edge (random outcomes)

2/19/2026 6:16:02 PM	short term cautious up	5 days later	-1.46%	-0.73%
1/9/2026 1:47:56 PM	short term cautious down	7 days later	-0.12%	+0.06%
10/21/2025 2:06:48 AM	short term cautious down	5 days later	+4.80%	-2.40%
10/20/2025 11:51:24 PM	medium term cautious down	20 days later	+4.00%	-2.00%

Show all 4 wti results

yields

Chances of a rate rise this year have risen... if the labor market stays with unemployment around these levels and inflation goes a lot higher, absolutely it's hawkish.

9 calls

-+0

no reliable edge (random outcomes)

2/19/2026 6:16:02 PM	short term cautious up	5 days later	-0.93%	-0.47%
1/30/2026 1:43:29 PM	medium term up	21 days later	-5.75%	-5.75%
12/22/2025 2:42:18 PM	medium term up	20 days later	+0.43%	+0.43%
12/6/2025 1:57:50 AM	medium term up	21 days later	-1.34%	-1.34%
8/29/2025 2:18:19 PM	short term cautious down	6 days later	-5.40%	+2.70%

Show all 5 yields results

Asks about ECB's Peter Kazimir saying rate hikes could come sooner, and if an 'insurance hike' is likely.

Host
Janet Henry

Chances of an ECB rate rise this year have risen. They still have their first hike in 2027, but the risk is higher now.

They are incorporating new oil price assumptions and thinking about the implications for broader inflation.
Asks how sticky the inflation push from oil is, and how they are modeling it.

Host
Janet Henry

Modeling oil at $80 average for 2026, assuming the highest price is in the next month. Compares to 2022 but notes economies and labor markets are weaker now.

A lot of different moving parts are being modeled for implications on inflation.
Asks what control central banks have over near-term inflation risk from energy.

Host
Janet Henry

Central banks must maintain credibility and keep inflation expectations anchored. They will wait for data and react if inflation does not come in line with forecasts.

They can't do anything about the supply shock right now.
Asks if the energy shock is necessarily hawkish for the Fed.

Host
Janet Henry

In some senses, yes, because inflation is still elevated. But the Fed has a dual mandate and is roughly at neutral. If the labor market stays strong and inflation goes a lot higher, it would be hawkish.

That's why they don't think the Fed will cut rates further.
Asks about the importance of backward-looking CPI data today.

Host
Janet Henry

Doesn't put much importance on CPI due to noise from last year's government shutdown. Will wait for April data to see core CPI. All data is backward-looking before the oil shock.

Central banks will sit tight for now, make reassuring noises, but no need to rush.
Asks about UK gilts and the BOE response, given UK vulnerability to energy shocks.

Host
Janet Henry

The BOE also has to wait. They have postponed their rate cut call to November. The UK has a perception of a more persistent inflation problem.

Markets are worried about lower growth damaging fiscal dynamics.
Asks which country has fiscal space to deal with the oil shock.

Host
Janet Henry

Very few countries have fiscal space after post-COVID spending. If oil gets out of control, we may see intervention anyway, even if it's unaffordable.

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