The US-Iran agreement on a two-week ceasefire and reopening of the Strait of Hormuz marks a significant but fragile de-escalation in a conflict that had threatened global energy supply. The strait, through which around 20% of global oil flows, will see shipping resume, pushing oil prices below $96 per barrel. This reduces immediate inflation pressures, particularly for energy-importing economies already facing elevated prices. Lower oil costs could support expectations that inflation will ease, giving central banks such as the Bank of England and Federal Reserve more flexibility on interest rates, especially as recent data shows mixed growth and inflation trends. However, the short-term nature of the truce means risks remain high, and any escalation could quickly reverse the trend. Markets reacted positively, with equities rising and bond yields easing slightly.