Mohamed El-Erian, professor at the Wharton School and chief economic advisor at Allianz, says the war, among other things, is wearing down confidence in the U.S. and its “ability to inform and influence outcomes.”
The New York Fed’s survey shows people expect inflation to hit 3.4% in a year. That’s up from an expectation of 3% in February, before the war in the Middle East started.
The Institute for Supply Management’s Purchasing Managers Index, out on Monday, showed that the prices businesses pay for what they need shot up 7.7 percentage points in March.
As the war in Iran pushes oil prices higher, some governments are shielding consumers with price controls. But economists warn that caps mask scarcity signals and can trigger the kind of panic buying that can even drive up oil prices more.
The U.S. is the world's largest producer of both oil and natural gas, but only one of those commodities is hitting American consumers. The reason comes down to infrastructure.
Analysts say the global oil market faces months of disruption from damaged infrastructure, a slow reopening of the Strait of Hormuz, and drawn-down reserves.
