UBP says Fed, ECB tightening stance persists despite falling oil prices
SPY•Inflation and sticky services still a concern
UBP said US inflation rose to 4.2% in May, the highest since April 2023, while euro zone inflation held near 3.2%.
The bank pointed to resilient US consumption and sticky core services ex-housing inflation, with surveys showing firms still planning price rises.
UBP said AI investment is currently inflationary via chips, power, copper and steel, raising doubts central banks can ease even if oil stays weak.
UBP sees central banks staying hawkish despite softer oil
Union Bancaire Privee flagged a widening gap between markets pricing disinflation and central banks staying hawkish despite falling oil prices.
The bank said the European Central Bank lifted its key rate by 25 bps to 2.25%, its first increase since 2023, while the Fed dot plot showed half of members expect at least one hike.
