The US Federal Reserve (Fed) raised interest rates on Wednesday for the first time in more than three years, increasing the target range for the federal funds rate by 25 basis points to 3.75%–4.00%. The move, which fully met market expectations, also signaled new rate hikes in the near future. The decision by the monetary authority of the world’s largest economy effectively signals the beginning of a new phase in global financial markets.

It is clear that the period of monetary easing that prevailed around the world since the second half of 2025 is now behind us. At that time, amid easing inflation, central banks were expected to gradually cut their policy rates, and many regulators, including the Central Bank of Azerbaijan (CBA), had begun lowering rates. However, renewed tensions in the Middle East at the beginning of 2026 and their direct impact on oil prices reignited global inflationary pressures.

As if the imbalance created in energy markets by the Russia-Ukraine war, which has continued since 2022, were not enough, geopolitical chaos surrounding the Gulf countries with major oil and gas reserves and Iran once again triggered fuel price rises. As a result, the optimism surrounding rate cuts in the second half of........

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