The implications of the Israel-Hezbollah ceasefire

The economic impact of the Israel-Hezbollah ceasefire hinges on whether the deal holds and whether it sets the stage for a broader de-escalation of the regional conflict. If it does, that would allow Lebanon’s shattered economy to recover and ease fiscal and inflation concerns in Israel. That said, although oil prices might fall further, we don’t think the move would be large. And even if shipping disruptions were to ease, we doubt that would have a major bearing on the global inflation outlook.