Uncertainty In The Middle East, Potential Risk Factors For U.S. Economy

Summary

• The US may be on the cusp of becoming an active participant in the conflict. If so, the decision will expand and deepen the uncertainty for the Middle East and the US on the geopolitical and economic fronts.
• The high-stakes decision for the US comes at a precarious point in economic terms. If energy costs increase further, the shift will raise headline inflation. In turn, that would increase stagflation risk, with possible ramifications for monetary policy.
• The good news is that the US economy, despite tariff risk, continues to show a fair amount of resiliency.

Galeanu Mihai

The question resonates after President Trump publicly mused about what could be the most momentous decision of his presidency. Bound up with that decision are high-stakes repercussions that could reverberate through the US economy and around the world.