Published On 4/7/2026
Qatar National Bank (QNB) expected that the US Federal Reserve (the central bank) would adopt a more stringent approach to monetary policy under the leadership of its new Chairman, Kevin Warsh.
It is likely that interest rate decisions during the coming period will remain hostage to developments in economic data, in light of continuing inflationary pressures and rising inflation expectations.
The bank explained – in its weekly report – that inflation rates remain at levels above the target of 2%, in addition to the Federal Reserve officials continuing to warn of the risks of rising prices, strengthening the possibilities of continuing monetary tightening, making raising interest rates the most likely option during the next stage.
The report indicated that the markets expect an interest rate increase of 25 basis points by the end of the year, which would raise the base interest rate to 4%, with a high possibility of it being raised during the first quarter of next year.
He pointed out that the outlook for US monetary policy has witnessed a noticeable shift in recent months, as expectations at the beginning of the year indicated a gradual monetary easing cycle in light of stable growth and moderate inflation, but the escalation in the Middle East and the accompanying rise in energy prices led to the disruption of this path.
The report noted that the appointment of Kevin Warsh as Chairman of the Federal Reserve strengthened the focus on restoring price stability, and contributed to supporting expectations of continued monetary tightening and increasing the possibilities of raising interest rates during the coming period.
The report considered that the Federal Reserve’s tendency toward tightening is not only related to current inflation levels, but also reflects considerations related to maintaining the credibility of monetary policy in achieving price stability.
