Europe: Optimism with a Lag

In this episode of The Global Economy Unwrapped, Gaurav Ganguly is joined by Andrew Hunter, Kamil Kovar, and Barbara Teixeira Araújo to discuss the team’s expectations for the conflict in the Middle East and its implications for the European outlook. The panel agrees that the most likely path forward is a messy reopening of the Strait of Hormuz, though there is less consensus on how quickly this will materialize. They then assess the inflationary consequences, emphasizing that the duration of elevated oil prices is the key determinant of indirect and second‑round effects. The discussion also turns to monetary policy, debating whether the ECB delivers an “insurance hike” amid fragile growth and subdued demand.

Link to the Conflict in the Middle East Webinar: https://events.moodys.com/ta15998-2026-bank-wbn-map28525-conflict-in-the-middle-east

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