The conflict between the United States and Iran has prompted major global central banks, including the Federal Reserve, the European Central Bank, the Bank of Japan and the Bank of England, to approach monetary policy decisions more cautiously this week. Rising oil prices have increased concerns about a new inflation shock, weakening market expectations for interest-rate cuts, particularly in the US. Meanwhile, investors are now even pricing in the possibility of interest-rate hikes in Europe and the UK later this year.

Donald Trump called for the deployment of warships by the United States and several other countries to keep the Strait of Hormuz open so that commercial vessels can pass safely. At the same time, the US and Israel struck military facilities on Kharg Island, but Trump said oil infrastructure was deliberately spared and warned that it could become a target if Iran interferes with ship traffic through the strait. Fighting in the Persian Gulf continues, with Iran carrying out retaliatory attacks on Arab states in the region and US-linked bases. As tensions escalated, Brent crude prices rose above 100 dollars per barrel.

According to an OPEC survey, the group’s oil output rose by 640,000 barrels per day last month to about 29.52 million barrels per day, with much of the increase coming from Saudi Arabia. The production boost occurred before the Iran-US/Israel conflict as regional tensions were rising. However, after disruptions to tanker traffic through the Strait of Hormuz, part of the Gulf countries’ production has been halted, keeping pressure on global oil markets.

US job openings, according to the BLS report, rose to 6.95 million in January from 6.55 million in December, while layoffs declined. However, hiring did not increase significantly, indicating continued signs of weakness in the labor market. The ratio of job openings to unemployed workers remained at 0.9, reinforcing the Federal Reserve’s view that the labor market is not currently generating strong inflationary pressure.