Iran war: Look beyond stocks to understand state of economy, experts say
The US-Israel war on Iran is escalating again and oil prices are on the rise, but experts say the real clues to the state of the economy lie beyond...
Key points
- The US-Israel war on Iran is escalating again and oil prices are on the rise, but experts say the real clues to the state of the economy lie beyond indices and those price points.
- “The markets have been somewhat quiescent in the last month or two, but have changed since the war in Iran began,” said Michael Klein, professor of international economic affairs at Tufts’ Fletcher School.
- It also shows that investors are expecting inflation to rise more as the Strait of Hormuz, the strategic chokepoint through which 20 percent of the world’s oil travelled before the war, continues to remain practically closed after a brief respite when cargo flows picked up in the days after the US and Iran signed a memorandum of understanding to extend their ceasefire.
- That was led by a decline in energy prices, including a 9.7 percent drop in oil prices, according to the Department of Labor’s Bureau of Labor Statistics Consumer Price Index (CPI).
What happened
The US-Israel war on Iran is escalating again and oil prices are on the rise, but experts say the real clues to the state of the economy lie beyond indices and those price points. “The markets have been somewhat quiescent in the last month or two, but have changed since the war in Iran began,” said Michael Klein, professor of international economic affairs at Tufts’ Fletcher School. It also shows that investors are expecting inflation to rise more as the Strait of Hormuz, the strategic chokepoint through which 20 percent of the world’s oil travelled before the war, continues to remain practically closed after a brief respite when cargo flows picked up in the days after the US and Iran signed a memorandum of understanding to extend their ceasefire. That was led by a decline in energy prices, including a 9.7 percent drop in oil prices, according to the Department of Labor’s Bureau of Labor Statistics Consumer Price Index (CPI). Rachel Ziemba, adjunct senior fellow at the Center for a New American Security, agrees that the past month “has gone from overoptimism of what the oil flows will be” as oil prices sold off even before the MoU was signed and on the back of some increase in...