Iran Conflict May Lead to Higher Global Inflation Floor

The ongoing conflict involving Iran has the potential to establish a structurally higher global inflation floor, following a period from 2008 to 2021 when global Consumer Price Index (CPI) averaged below 3%. According to NS3.AI, recent disruptions in the Strait of Hormuz have highlighted vulnerabilities in energy supply chains, which could restrict central banks' ability to reduce interest rates or rapidly inject liquidity into the economy.