Economic Forecasters Warn of Broader Impact
Ryan Sweet, Chief Global Economist at Oxford Economics, warned that the breakdown of the pact poses a significant threat to second-half macroeconomic performance.
He characterized the peace agreement as the key risk determining whether the global economy gets an energy-driven disinflation tailwind or absorbs a second oil shock.
Sweet explained that a permanent breakdown would raise oil prices, increase pressure on AI supply chains in Asia, force central banks to be hawkish, and could shift the outcome of the U.
S. midterms.
Arne Petimezas, Director of Research at AFS Group in Amsterdam, questioned the finality of Trump's declarations, noting that Trump can "turn on a dime."
He doubted that Trump would wage war with Iran into the elections.
Chris Beauchamp, Chief Market Strategist at IG in London, said the news weighs heavily on sentiment.
He anticipated that a limited sequence of exchanges would precede a return to negotiations, as both sides want a deal.
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Analysts are monitoring whether negotiations continue, the number of ships passing through the Strait of Hormuz, and oil and natural gas inventories.
