Tariffs, Oil, and Inflation: Why Markets Are Watching but Central Banks Wait

AXA Investment Managers’ Macrocast #274 offers a timely macroeconomic analysis of geopolitical risk, inflation dynamics, and monetary policy, authored by the firm’s global research team.

• Despite oil price spikes from the Israel-Iran conflict, inflation pass-through remains muted—suggesting delayed or absorbed cost pressures.

• Fed likely to maintain a "wait and see" stance, with internal divergence growing between dovish and hawkish members ahead of 2026–27 policy decisions.

• Consumer inflation expectations remain elevated, but weak wage and margin response may ease the path toward rate cuts later in 2025.

Explore the full report for detailed scenarios on inflation persistence, labor markets, and the evolving Fed trajectory.