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ING's James Knightley highlights that February US inflation remained stable before recent Iran-related military actions, with core inflation and goods prices showing minimal impact from tariff policies. However, he warns that rising energy prices could push headline CPI higher in subsequent months, potentially complicating the Federal Reserve's inflation control efforts. Energy costs are a key driver of headline inflation, and any geopolitical tensions disrupting oil markets could amplify this risk. For traders, the focus shifts to energy markets and their influence on broader inflation metrics. A surge in oil prices could trigger a reevaluation of Fed rate hike expectations, affecting USD strength and global equity markets. Investors should monitor upcoming CPI data and central bank statements for policy signals. The analysis underscores the interconnectedness of geopolitical events and macroeconomic indicators. For Gulf investors, energy price volatility could impact regional trade balances and inflation dynamics. Key watchpoints include OPEC+ policy decisions, US-Iran relations, and the Fed's response to inflationary pressures.
