UniCredit: Central banks will ignore short-term volatility; the Fed is expected to cut rates once this year.

In a report, Marco Valli and Daniel Vernazza, chief economists at UniCredit Investment Institute, stated that the military action against Iran is expected to last for several weeks, allowing central banks to temporarily ignore short-term turmoil, after which tensions and energy supply disruptions should ease. They said, "In our baseline scenario, the Federal Reserve is still expected to cut rates only once this year, while the European Central Bank will keep rates unchanged until 2027." The two chief economists added that the risks facing the ECB this year have shifted from additional monetary easing to the possibility of earlier policy tightening. (Jinshi)