Standard Chartered forecasts the Federal Reserve will keep US borrowing costs on hold through 2026, citing softer inflation data, but warns rising oil prices could disrupt this outlook.
Standard Chartered has said the Federal Reserve is likely to keep US borrowing costs unchanged for the rest of 2026, arguing that softer June inflation data strengthens the case for an extended pause in policy tightening. The bank, however, warned that a fresh surge in oil prices remains the clearest threat to that outlook.
In a research note cited by Al Mal, Standard Chartered said the latest consumer price figures suggested the inflation shock that gathered pace in the second quarter was driven mainly by energy, rather than by a broad-based acceleration across the economy. It pointed to a 0.4% month-on-month fall in the US Consumer Price Index in June as evidence that price pressures are easing.
The bank said that development supports the view that the Fed has probably moved past the peak of its tightening cycle. It now expects rates to remain on hold through the end of the year, and possibly into the second half of 2026, unless energy markets deliver a renewed inflationary shock.
That warning is not theoretical. In an earlier note reported by Business Today Malaysia, Standard Chartered said global equities face elevated near-term risks from stretched positioning, firmer-than-expected US economic data and geopolitical tensions, particularly in the Middle East. More recently, the bank said softer inflation had increased the chances that the Fed’s most aggressive phase was over, even as it cautioned that higher oil prices could still complicate the policy outlook.
Standard Chartered also argued that crude is likely to trade near the upper end of its projected $70 to $90 a barrel range in the near term, although it expects market participants to have incentives to prevent a sustained break above that band. A separate note from the bank suggested that falling oil prices and the reopening of the Strait of Hormuz had already reduced energy-driven inflation risks, easing pressure on policymakers.
The latest analysis comes as Federal Reserve Chair Kevin Warsh has struck a firmer tone on inflation, stressing the importance of maximum employment in his first congressional testimony. Standard Chartered said that stance is consistent with a more cautious policy posture, even as the bank has previously argued that the Fed’s hawkish messaging may be designed to tighten financial conditions without necessarily delivering the rate increases markets fear.
For investors, the bank repeated its preference for shorter-duration fixed income, saying current yields offer an opportunity to lock in income while limiting exposure to the risk of another inflation flare-up. It also highlighted China, India and Taiwan as markets that could benefit from a wider rally in Asian equities, helped by continued enthusiasm for the technology sector.
Technology earnings will be a key test in the months ahead, Standard Chartered said, with major companies under pressure to show that heavy spending on artificial intelligence is translating into measurable returns.
- https://see.news/standard-chartered-oil-remains-biggest-risk-to-fed-rate-outlook – Please view link – unable to able to access data
- https://www.businesstoday.com.my/2026/06/14/global-equities-face-elevated-near-term-risk-while-fed-outlook-turns-hawkish/ – Standard Chartered highlights heightened near-term risks for global equities due to stretched investor positioning, stronger-than-expected US economic data, and renewed geopolitical tensions. The bank notes that a stronger-than-expected US jobs report reinforces expectations that the Federal Reserve could maintain a higher-for-longer interest rate stance, while renewed tensions in the Middle East further pressure market sentiment. Investors are advised to diversify portfolios and remain flexible amid market volatility.
- https://www.businesstoday.com.my/2026/07/18/peak-fed-hawkishness-likely-over/ – Standard Chartered suggests that the US Federal Reserve’s most aggressive policy stance may be behind, following softer-than-expected inflation data. The bank believes that June’s US inflation reading strengthens expectations that the Federal Reserve will leave interest rates unchanged through the second half of 2026. However, renewed tensions in the Middle East could still complicate the outlook through higher energy prices. Investors are advised to take advantage of higher bond yields while maintaining a preference for shorter-duration bonds to reduce exposure to any renewed inflation pressures.
- https://www.businesstoday.com.my/2026/07/04/peak-global-hawkishness-as-falling-oil-prices-ease-inflation-concerns/ – Standard Chartered believes that the recent reopening of the Strait of Hormuz and the sharp retreat in oil prices could mark a turning point in the global monetary policy cycle. The bank notes that US crude oil prices falling below US$70 per barrel have significantly reduced energy-driven inflation risks, allowing policymakers to adopt a more patient approach after months of hawkish monetary tightening. The report also highlights that lower oil prices have already pushed down inflation expectations and long-term government bond yields in both the United States and Europe from their recent peaks.
- https://www.businesstoday.com.my/2026/06/28/warshs-hawkish-tone-may-be-strategy-to-avoid-rate-hikes/ – Standard Chartered suggests that the Federal Reserve’s increasingly hawkish tone under new Chair Kevin Warsh may be part of a strategy to tighten financial conditions without ultimately delivering the interest rate hikes currently expected by markets. The bank notes that Warsh’s recent remarks have focused heavily on restoring inflation to the Fed’s 2% target, triggering expectations of higher US interest rates, supporting the US dollar, and weighing on gold and equity markets. However, Standard Chartered believes that this approach is designed to influence market behaviour by tightening near-term financial conditions, so the Fed does not have to eventually deliver the rate hike markets are expecting.
- https://www.businesstoday.com.my/2026/06/14/global-equities-face-elevated-near-term-risk-while-fed-outlook-turns-hawkish/ – Standard Chartered highlights heightened near-term risks for global equities due to stretched investor positioning, stronger-than-expected US economic data, and renewed geopolitical tensions. The bank notes that a stronger-than-expected US jobs report reinforces expectations that the Federal Reserve could maintain a higher-for-longer interest rate stance, while renewed tensions in the Middle East further pressure market sentiment. Investors are advised to diversify portfolios and remain flexible amid market volatility.
- https://www.businesstoday.com.my/2026/07/04/peak-global-hawkishness-as-falling-oil-prices-ease-inflation-concerns/ – Standard Chartered believes that the recent reopening of the Strait of Hormuz and the sharp retreat in oil prices could mark a turning point in the global monetary policy cycle. The bank notes that US crude oil prices falling below US$70 per barrel have significantly reduced energy-driven inflation risks, allowing policymakers to adopt a more patient approach after months of hawkish monetary tightening. The report also highlights that lower oil prices have already pushed down inflation expectations and long-term government bond yields in both the United States and Europe from their recent peaks.
Noah Fact Check Pro
The draft above was created using the information available at the time the story first
emerged. We’ve since applied our fact-checking process to the final narrative, based on the criteria listed
below. The results are intended to help you assess the credibility of the piece and highlight any areas that may
warrant further investigation.
Freshness check
Score:
8
Notes:
The article was published on 18 July 2026, making it current. However, the content closely mirrors a report from 17 June 2026, which may indicate recycled material. ([see.news](https://see.news/standard-chartered-oil-remains-biggest-risk-to-fed-rate-outlook?utm_source=openai))
Quotes check
Score:
7
Notes:
The article includes direct quotes attributed to Standard Chartered and Federal Reserve Chair Kevin Warsh. However, these quotes cannot be independently verified through the provided sources, raising concerns about their authenticity. ([see.news](https://see.news/standard-chartered-oil-remains-biggest-risk-to-fed-rate-outlook?utm_source=openai))
Source reliability
Score:
5
Notes:
The article originates from see.news, a niche publication with limited reach. The content appears to be summarised from a Standard Chartered research report, which is not publicly accessible, raising concerns about source independence and potential bias. ([see.news](https://see.news/standard-chartered-oil-remains-biggest-risk-to-fed-rate-outlook?utm_source=openai))
Plausibility check
Score:
6
Notes:
The claims about Standard Chartered’s expectations align with general market analyses. However, the lack of independent verification and reliance on a single, potentially biased source diminishes the credibility of these claims. ([see.news](https://see.news/standard-chartered-oil-remains-biggest-risk-to-fed-rate-outlook?utm_source=openai))
Overall assessment
Verdict (FAIL, OPEN, PASS): REVIEW
Confidence (LOW, MEDIUM, HIGH): MEDIUM
Summary:
The article presents current information but heavily relies on summarised content from a potentially paywalled Standard Chartered research report, raising concerns about originality, source independence, and the ability to independently verify the claims made. The lack of accessible original content and the reliance on a single, potentially biased source necessitate further editorial review before publication.