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The impact of the war with Iran on the US economy
The war with Iran introduces another negative supply shock to the US economy. Of course, the US has become a net exporter of oil and natural gas, so it is less vulnerable to global supply disruptions than in the past. However, the US economy remains sensitive to global oil prices, because domestic fuel prices are closely related. Consequently, this war is still likely to have a stagflationary impact on the US economy, i.e. higher inflation and weaker GDP growth. In this report we discuss our new baseline forecasts for US inflation and GDP growth, as well as three additional risk scenarios. Our baseline scenario for ... (full story)
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