Columbia Threadneedle Investments: Market Perspectives: What will central banks do about $100 oil?

Key Takeaways

• Events in the Middle East mean uncertainty for financial markets. That said, moves remain relatively modest. The S&P 500 stands around 5% lower.
• The Strait of Hormuz is key. Iran has effectively blocked it to shipping, which in turn keeps oil prices high and raises concerns around inflation and economic growth.
• Escort convoys have been proposed to get shipping moving, but such initiatives will take time to implement. In the meantime, Iran has the economic upper hand.
• Many central banks are meeting this week and a likely spike in inflation has flipped the narrative from one of likely easing.
• The situation remains uncertain and fluid. We continue to monitor developments closely.