Global Forward View: Middle-East peace and the Fed’s family fight

19 June 2026
Economy and Markets

• Oil prices hit post-war lows after the US-Iran agreement — but the deal’s durability is uncertain.
• NAB sees global growth steady at 3.1% in 2026 and 3.2% in 2027, helped by the AI-driven tech cycle.
• The Fed is divided, with rates expected to stay on hold unless inflation surprises again.

NAB’s latest Global Forward View says the US-Iran agreement has pushed oil prices to their lowest level since the Iran war began, though uncertainty remains over whether the deal will hold. NAB’s global growth forecasts are little changed at 3.1% in 2026 and 3.2% in 2027, with growth expected to remain reasonable despite pressure from higher energy prices and tighter monetary policy.

NAB Senior Economist Antony Kelly said while global growth had moderated in the first quarter, it will continue to be supported by the ongoing AI boom and strength in the East Asian economies at the centre of the AI supply chain.

“The AI boom is providing an offset to some growth headwinds, but it is also adding to inflationary pressures,” Mr Kelly said.

“The rise in energy and AI related prices is driving up measures of producer price inflation. Core inflation across advanced economies has yet to see a notable lift but pass through typically takes time to evolve.

“Fed communications have moved hawkish. We still expect the fed funds rate to remain unchanged through to end-2027, but any further upside inflation surprises will tip the Fed over to hikes.”

View the full June NAB Global Forward View (PDF, 1MB) report.

ENDS