BofA: Fed may resume rate hikes if oil shock continues

The U.S. Federal Reserve could resume interest rate hikes if the current oil price shock and geopolitical uncertainty persist, Bank of America (BofA) has analyzed. According to Walter Bloomberg, BofA noted that a combination of a stable job market, the continuation of Jerome Powell's leadership, and a sustained oil shock could prompt the Fed to raise rates again. The bank suggested that the likelihood of a rate hike increases if oil prices remain in the $80 to $100 per barrel range. BofA explained that inflation and rising energy costs are currently weighing on the Fed's policy decisions, limiting the potential for rate cuts. It also highlighted that Fed Chair Powell is maintaining a hawkish stance, emphasizing inflation risks and uncertainty related to Iran.