Economists: US-Iran deal reduces recession risk, but does not change outlook.

According to a report by Oxford Economics, Ben May and Bridget Payne stated that while future setbacks are possible, the US-Iran agreement has reduced the risk of a continued decline in oil inventories, potentially triggering a surge in global energy prices and leading to an economic recession. However, they noted that this does not automatically mean that the amount of oil flowing through the Strait of Hormuz will increase faster than previously expected. "We had assumed that shipping through the Strait of Hormuz would resume by the end of July. Nevertheless, our current short-term oil price forecasts still look overly optimistic," they added. They further explained that since the reopening of the Strait of Hormuz is likely to help lower inflation but has a limited impact on economic growth, this news further reinforces their view that the Federal Reserve and the Bank of England will not raise interest rates, and other central banks that have already raised rates are unlikely to do so again. (Jinshi)