The global macroeconomic risks surrounding a possible ceasefire deal between Israel and Hamas are asymmetric. An agreement – while having significant economic consequences for countries in the region – would probably not itself be a game-changer for global oil prices, inflation, and interest rates. However, a collapse of talks would make an escalation of the conflict more likely, which would raise the risk of a renewed surge in oil prices that would underpin higher inflation and fewer rate cuts in major economies.
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