Inflation, Uncertainty And Fear: Economists Offer Grim Warning Over Donald Trump’s Iran War

"There are many stresses on our economy, and this could be the straw that breaks the camel’s back — a straw that becomes heavier the longer the war goes on."

Economists are sounding the alarm over the current — and potential — fallout from the U.S.-Israeli war on Iran.

MS NOW economic analyst Steve Rattner on Wednesday was asked what could happen to inflation, oil prices and other economic indicators if the conflict — which President Donald Trump initially said may last four weeks but now admits could run much longer — drags on.

“A lot of bad things,” he said. “A lot of bad things.”

Rattner explained:

“The oil prices could spike some more. As I said, I don’t think it affects our supply, but it affects the prices people pay at the pump and for their home heating oil and even for their natural gas because a lot of natural gas also passes through the Strait of Hormuz. And so then you get more inflation, you get the potential for higher interest rates, you get the uncertainty and the fear of what could happen. And yeah, all that is really bad for the stock market. The stock market’s reaction so far has actually been quite muted. It was down about 1% yesterday. It looks like it will open about flat today. That’s a pretty benign reaction, given everything that could have happened. But the potential for a much bigger stock market disruption is certainly right there if this war were to widen out, or if something unexpectedly bad were to happen to us, to our troops, to the whole Middle Eastern situation.”