Opinion: US-Iran war to shake global economy but remain short

Shafaq News- Washington

The war between the United States and Iran will have broad repercussions for the global economic environment, a financial analyst told Shafaq News on Tuesday, suggesting the conflict is unlikely to last long.

According to analyst Peter Tanos, oil prices will remain elevated until political leaders reach a settlement. “The US financial system is capable of absorbing the current pressures, as its resilience allows it to withstand the war’s economic repercussions without posing a serious threat to financial stability.”

Tanos said that the US Federal Reserve faces a complex economic dilemma as employment data weakens while inflation risks rise due to the war. The Fed may opt to keep interest rates unchanged for the time being because cutting them to stimulate the economy could increase inflationary pressure.

“The dollar will remain the world’s leading reserve currency and a haven during geopolitical crises,” he indicated, noting that the dollar may face futures competition, but it is likely to remain the primary choice in global trade.

Regarding precious metals markets, Tanos said gold will continue to play its traditional role as a safe haven during periods of uncertainty, though he warned against excessive expectations of further gains. Prices surged over the past year, he noted, meaning the metal’s capacity for substantial additional increases may be limited.

Assessing the trajectory of the conflict, Tanos suggested that “the United States and Israel maintain complete air superiority over Iran and can target any location,” making Tehran’s ability to withstand such pressure limited over time. He predicted that initiatives to end the war could emerge within about a week as military and economic pressures intensify.

For Shafaq News, Mostafa Hashem, Washington, D.C.