{"id":61794,"date":"2026-05-11T01:38:18","date_gmt":"2026-05-11T05:38:18","guid":{"rendered":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/geopolitical-tensions-and-hawkish-ecb-rhetoric-shake-global-markets-fed-cut-hopes-recede-to-2027\/61794\/"},"modified":"2026-05-11T01:38:18","modified_gmt":"2026-05-11T05:38:18","slug":"geopolitical-tensions-and-hawkish-ecb-rhetoric-shake-global-markets-fed-cut-hopes-recede-to-2027","status":"publish","type":"post","link":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/geopolitical-tensions-and-hawkish-ecb-rhetoric-shake-global-markets-fed-cut-hopes-recede-to-2027\/61794\/","title":{"rendered":"Geopolitical Tensions and Hawkish ECB Rhetoric Shake Global Markets; Fed Cut Hopes Recede to 2027"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"#\" data-href=\"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/geopolitical-tensions-and-hawkish-ecb-rhetoric-shake-global-markets-fed-cut-hopes-recede-to-2027\/61794\/#Key_Takeaways\" >Key Takeaways<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"#\" data-href=\"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/geopolitical-tensions-and-hawkish-ecb-rhetoric-shake-global-markets-fed-cut-hopes-recede-to-2027\/61794\/#ECB_Signals_Hawkish_Pivot_Amid_Middle_East_Conflict\" >ECB Signals Hawkish Pivot Amid Middle East Conflict<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"#\" data-href=\"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/geopolitical-tensions-and-hawkish-ecb-rhetoric-shake-global-markets-fed-cut-hopes-recede-to-2027\/61794\/#Fed_Easing_Pushed_to_2027_KOSPI_Defies_Global_Gloom\" >Fed Easing Pushed to 2027; KOSPI Defies Global Gloom<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"#\" data-href=\"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/geopolitical-tensions-and-hawkish-ecb-rhetoric-shake-global-markets-fed-cut-hopes-recede-to-2027\/61794\/#Geopolitical_Escalation_and_Diplomatic_Maneuvering\" >Geopolitical Escalation and Diplomatic Maneuvering<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"#\" data-href=\"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/geopolitical-tensions-and-hawkish-ecb-rhetoric-shake-global-markets-fed-cut-hopes-recede-to-2027\/61794\/#Commodities_and_Industrial_Price_Hikes\" >Commodities and Industrial Price Hikes<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"#\" data-href=\"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/geopolitical-tensions-and-hawkish-ecb-rhetoric-shake-global-markets-fed-cut-hopes-recede-to-2027\/61794\/#Analyst_Actions_and_Corporate_Moves\" >Analyst Actions and Corporate Moves<\/a><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"Key_Takeaways\"><\/span>Key Takeaways<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<ul>\n<li><strong>ECB Official Kocher signals &quot;inevitable&quot; near-term rate hikes<\/strong> if economic conditions and energy-driven inflation risks from the ongoing Iran war do not subside.<\/li>\n<li><strong>Bank of America (BofA) delays U.S. Fed rate cut expectations to mid-to-late 2027<\/strong>, citing persistent inflationary pressures and geopolitical instability.<\/li>\n<li><strong>South Korea\u2019s KOSPI index surged 5%<\/strong>, leading Asian markets despite heightening tensions in the Middle East and a high-stakes meeting between Donald Trump and Xi Jinping.<\/li>\n<li><strong>Energy logistics shift as Japan receives its first Central Asian crude tanker<\/strong> since the start of the Iran war, while <strong>Malaysia reports an 18.37% jump in April palm oil production<\/strong>.<\/li>\n<li><strong>Geopolitical volatility intensifies<\/strong> as Israel conducts airstrikes in Southern Lebanon and moves toward a death penalty proposal for October 7-linked suspects.<\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"ECB_Signals_Hawkish_Pivot_Amid_Middle_East_Conflict\"><\/span>ECB Signals Hawkish Pivot Amid Middle East Conflict<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>European Central Bank (ECB) official <strong>Kocher<\/strong> has delivered a series of hawkish warnings, stating that a <strong>near-term interest rate hike is &quot;inevitable&quot;<\/strong> if current conditions fail to improve. Kocher defended the central bank&#39;s decision to pause in April but emphasized that the <strong>duration of the Iran war<\/strong> remains a critical variable for monetary policy.<\/p>\n<p>The ECB is particularly concerned with <strong>higher second-round inflation risks<\/strong> if energy prices remain elevated due to the conflict. Kocher noted that the central bank is ready for <strong>&quot;timely action&quot;<\/strong> to combat rising risks, even as the broader economic recovery shows signs of weakening under the weight of Middle East tensions.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Fed_Easing_Pushed_to_2027_KOSPI_Defies_Global_Gloom\"><\/span>Fed Easing Pushed to 2027; KOSPI Defies Global Gloom<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>In a significant shift for U.S. monetary expectations, <strong>Bank of America<\/strong> now forecasts that the <strong>Federal Reserve will not begin easing rates until mid-to-late 2027<\/strong>. This delay reflects a growing consensus that inflation remains too stubborn to allow for near-term relief, a sentiment that pressured <strong><a href=\"https:\/\/stockmarketwatch.com\/metal\/gold\" data-internallinksmanager029f6b8e52c=\"4\" title=\"gold price today\">Gold prices<\/a><\/strong> lower as the U.S.-Iran diplomatic stalemate continues.<\/p>\n<p>Despite the hawkish global outlook, South Korea\u2019s <strong>KOSPI (<a href=\"\/stock\/KOSPI\">KOSPI<\/a>)<\/strong> jumped <strong>5%<\/strong>, extending a strong rally in the Seoul market. However, the fixed-income market showed signs of stress, with the <strong>20-year Japanese Government Bond (JGB) yield advancing to the 3.390% level<\/strong>, reflecting broader concerns over long-term inflation.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Geopolitical_Escalation_and_Diplomatic_Maneuvering\"><\/span>Geopolitical Escalation and Diplomatic Maneuvering<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Tensions in the Middle East escalated as <strong>Israel conducted a series of airstrikes<\/strong> on towns and villages in Southern Lebanon, specifically targeting <strong>Kfar Tebnit and Choukine<\/strong>. Simultaneously, Israeli legislators are moving forward with a <strong>death penalty proposal<\/strong> for individuals involved in the October 7 assaults, a move likely to further inflame regional tensions.<\/p>\n<p>On the diplomatic front, a high-profile meeting between <strong>Donald Trump and Xi Jinping<\/strong> has kept markets on edge regarding potential shifts in U.S. policy toward Taiwan. Reports indicate that Trump has spoken with the Chinese leader multiple times regarding <strong>Beijing\u2019s financial support for Iran and Russia<\/strong>, highlighting the complex web of global alliances impacting trade and security.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Commodities_and_Industrial_Price_Hikes\"><\/span>Commodities and Industrial Price Hikes<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>In the energy sector, Japan\u2019s Industry Ministry confirmed that the <strong>first Central Asian crude tanker<\/strong> since the outbreak of the Iran war has set sail for Japan. This marks a critical pivot in energy procurement as traditional routes remain disrupted. Meanwhile, <strong>Malaysia\u2019s crude palm oil production climbed 18.37% in April<\/strong> to 1.63 million tons, with end-stocks rising to <strong>2.31 million tons<\/strong>.<\/p>\n<p>Industrial materials are also seeing upward price pressure. <strong>Baosteel<\/strong> announced it is lifting prices for <strong>Hot-Rolled and Cold-Rolled Coil<\/strong> for June shipments by <strong>100 Yuan per metric ton<\/strong>. This move reflects rising input costs and a potential stabilization in Chinese industrial demand despite geopolitical headwinds.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Analyst_Actions_and_Corporate_Moves\"><\/span>Analyst Actions and Corporate Moves<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Wall Street analysts were active this morning with several significant rating changes:<\/p>\n<ul>\n<li><strong>JPMorgan<\/strong> downgraded <strong>Wendy\u2019s (<a href=\"\/stock\/WEN\">WEN<\/a>)<\/strong> to <strong>Underweight<\/strong>, slashing the price target to <strong>$6 from $7<\/strong>.<\/li>\n<li><strong>Berenberg<\/strong> raised its valuation for <strong>Rolls-Royce (<a href=\"\/stock\/RR\">RR<\/a>)<\/strong> to a target of <strong>1270p<\/strong>.<\/li>\n<li><strong>D.A. Davidson<\/strong> increased its target for <strong>The Timken Co. (<a href=\"\/stock\/TKR\">TKR<\/a>)<\/strong> to <strong>$117<\/strong>.<\/li>\n<li><strong>JPMorgan<\/strong> initiated coverage on nuclear firm <strong>Oklo (<a href=\"\/stock\/OKLO\">OKLO<\/a>)<\/strong> with a <strong>Neutral<\/strong> rating and an <strong>$83 target<\/strong>.<\/li>\n<li><strong>Stifel<\/strong> started coverage on <strong>Madison Air Solutions (<a href=\"\/stock\/MDN\">MDN<\/a>)<\/strong> with a <strong>Buy<\/strong> rating and a <strong>$47 target<\/strong>.<\/li>\n<li><strong>CIBC<\/strong> upgraded <strong>Dream Office REIT (<a href=\"\/stock\/D.UN\">D.UN<\/a>)<\/strong> to <strong>Outperformer<\/strong>, raising the target to <strong>C$21<\/strong>.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Key Takeaways ECB Official Kocher signals &quot;inevitable&quot; near-term rate hikes if economic conditions and energy-driven inflation risks from the ongoing 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