Resume af teksten:
Verdensøkonomien står over for en ny omkostningspushpåvirkning, hvor de amerikanske husholdningers energiregninger forventes at stige markant. Dette udvider den K-formede økonomi, idet lavindkomsthusholdninger tvinges til at reducere forbrug straks. En svag arbejdsmarkedssituation mindsker risikoen for andenrundeeffekter på inflationen. Hormuzstrædets lukning skaber logistiske udfordringer og påvirker olie- og LNG-forsyninger globalt. USA søger allierede til at beskytte tankere, mens Iran optrapper blokaden. Den økonomiske påvirkning afhænger af konfliktens varighed. Fed forventes at holde renten stabil, da nuværende økonomiske svagheder kan mildne inflationsbekymringer, og der er begrænset risiko for løn-pris-spiraler. Højere energipriser påvirker primært lavindkomsthusholdninger, hvilket øger risici for vækstreduktion, men begrænser overførsel af prisstigninger. Fed vil sandsynligvis afvente yderligere data før rentebeslutninger.
Fra ABN-Amro:
The world economy is facing another cost-push shock. US household energy costs are set to rise sharply. This will further widen the K-shaped economy, as lower income households are forced to reduce spending immediately. A weak labour market reduces the risk of second round inflation effects. Demand weakness and second-round pressures may largely offset each other. Keeping rates fixed may very well be the appropriate response.
Rogier Quaedvlieg
Head of Economic Modelling/Senior US Economist
The Strait of Hormuz has now been closed for approximately two weeks, cutting off a substantial share of global oil and LNG supply. Much of the supply transiting the Strait has no easy alternative route. As long as the passage remains closed, deliveries face significant physical constraints. Re‑opening the Strait therefore remains the most effective way to ease price pressures. As a result, the pressure to re-open is clearly mounting, with the US asking for allied warships to protect tankers in the region this weekend, and Trump even threatening that not coming to the US’ aid might end NATO. Meanwhile, Iran appears to be doubling down on closure, with evidence of mine-laying vessels in the Strait, as the resulting economic pressure is one of its strongest counterattacks.
All this is to say that this is not just a financial issue, but also a logistical issue. This disruption therefore also has some elements of the pandemic shock. Back then, there was a complete disruption of supply chains and production because of lockdowns. The Strait is obviously critical for oil and gas, but also for various fertilizers and agricultural inputs, and a number of other commodities, like sulfur and helium. This could similarly impact a variety of supply chains in case of a long-lasting closure. It’s therefore easy to see how one would worry about second round effects in inflationary pressures. The European economy has become more resilient since those previous shocks, and we expect limited second round effects. For the US, we believe the current spots of weakness should also ease some of those worries.
We reiterate that the ultimate impact of this shock heavily depends on the length of the conflict. We set out a number of scenarios in an earlier publication , where we concluded that the Fed was unlikely to respond in most scenarios, rather keeping rates on hold for an extended period of time. This piece evaluates what the impact and risks of such a Fed response might be.
A dovish, but reasonable, interpretation of the cost-push shock
The main difficulty of a supply shock is that it raises inflation and weakens growth at the same time, while the policy rate influences the two in opposite directions. That means there is no optimal response, and that a central bank has to choose; hike to lower inflation and/or keep inflation expectations in check, or ease to support growth and employment. The inflation expectation channel seems especially important given the fact that inflation has still not returned to target after the post-pandemic inflation surge, and household expectations already are excessively volatile, even if market pricing remains anchored. This would advocate for a hawkish response. We think the Fed might get away with a limited response, or perhaps no response at all.
Demand effects limit second round effects We’ve previously written about the US’ K-shaped economy. The US is currently running at two speeds, with high income asset owners doing well, and lower income ‘hand-to-mouth’ households doing poorly. The economy has until now been mostly in balance. The (predominantly AI-driven) upper arm drives investment and consumption growth, which dominates downward pressure from the lower income households. Higher oil prices are likely to drive this wedge further. Lower income households in the US have a larger energy share of consumption (predominantly petrol), and almost no buffer. This matters for the inflationary impact. Having to spend more on energy, low income households have to cut spending on other goods quickly. They have limited room to absorb the price shock, which also limits the ability of firms to pass-through price hikes. Given the already weak labour market, we’re also unlikely to see strong wage leverage. There is therefore limited scope for a wage-price spiral. The fact that the starting point is a K-shaped economy, rather than a ‘normal’ economy (to the extent that that exists), therefore means that the downside risk to growth in the near term is elevated, while second round inflation effects are slower and weaker.
The upper leg could also be at risk through tightening financial conditions. The energy price spike has already led to a tightening of financial conditions. Equity markets have dropped on changing assessments of earnings and discount rates and the dollar has strengthened. Further tightening by the Fed could unintentionally compound these effects, eroding asset valuations and potentially curbing consumption among higher‑income households as well. This reinforces the case for caution.
The Fed’s response function Of course, headline inflation moves immediately and sharply in response to the oil price shock. Markets have now priced in about an 0.9pp increase in inflation since the first attack on Iran. Central banks generally look through such first‑round effects. We judge it likely that the immediate consumption effect described above will outweigh the risk of second round effects, but the Fed will be weary of inflation expectations de-anchoring.
We’re therefore keeping an eye on personal spending, especially by household income, to see if the K-shape is indeed intensifying. Such a deterioration would ease some of the inflationary pressure we foresaw even before the shock, and limit second round effects of the new shock. On the other side of the coin, we’ve until now seen essentially no move in long-term inflation expectations, which remain at the lower end of the range of the past two years. In any case, we do not expect the conflict to have an impact on the upcoming meetings where the Fed was poised to keep rates at their current level. This will provide them with ample time to evaluate the various facets of the shock’s impact on the economy.
Rogier Quaedvlieg
Head of Economic Modelling/Senior US Economist
Hurtige nyheder er stadig i beta-fasen, og fejl kan derfor forekomme.
