Geopolitical Shock Halts Global Disinflation as AI Boom Diverges

The Middle East conflict has shattered the global disinflation trend, reigniting energy prices and forcing inflation to rise from 2.6% to 2.9% by 2026. Central banks face a brutal dilemma: tighten to anchor expectations or hold to protect growth, with the ECB and Fed now diverging sharply. Amidst this stagflationary pressure, the AI supercycle offers a fragile counterweight, yet geopolitical fragmentation threatens to cap the 2026 recovery at just 2.5%.