JPMorgan and ING analysts warn of risks to US economy posed by situation in Middle East

On Wednesday, US Federal Reserve Chairman Jerome Powell said that the regulator's officials are closely monitoring the situation in the Middle East. According to him, such tensions normally don't exert a lasting impact on inflation in the United States. At the moment, he said, there are no serious risks to the US economy.

However, according to JPMorgan economists, the threat of escalating tensions in the Middle East is now the main risk for the economy of both the US and the world.

James Knightley, chief international economist at ING, shares this view. According to him, the possible shutdown of the Strait of Hormuz would lead to a sharp rise in energy prices due to disruptions in oil and gas supply chains. Iran has repeatedly threatened to close the strait as one of its measures of influence.

Higher fuel costs will increase the financial burden on US consumers, especially against the backdrop of the already expected impact on prices from the new import duties. ING economists emphasize that higher costs for transportation and consumer goods may slow down US economic growth.