“All these things are happening at the same time,” Gill said. “We are at the most vulnerable crossroads for the global economy.”
Gill's assessment is in line with other analysts' assessments. JPMorgan Chase CEO Jamie Dimon said last month that “this may be the most dangerous time the world has seen in decades,” calling the Gaza conflict “the greatest and most dangerous moment for the Western world.” The most important thing.”
Recent economic problems have been exacerbated by deepening geopolitical conflicts across the continent. Tensions between the United States and China over technology transfer and security will only complicate efforts to cooperate on other issues such as climate change, debt relief and violent regional conflicts.
The primacy of political interests also means that traditional monetary and fiscal tools, such as interest rate adjustments and government spending, may be less effective.
The brutal fighting between Israel and Hamas has already claimed thousands of civilian lives and caused terrible misery on both sides. However, most analysts agree that if the conflict remains contained, the ripple effects on the global economy are likely to be limited.
Federal Reserve Chairman Jerome H. Powell said Wednesday that “it is not clear at this time whether the Middle East conflict is on track to have a significant economic impact on the United States.” That doesn’t mean it’s not very important.”
Middle Eastern oil producers are no longer dominating the market as they were in the 1970s, when Arab countries sharply cut production and imposed embargoes on the United States and some other countries after a coalition led by Egypt and Syria attacked Israel. Not that I'm doing it.
At the moment, the United States is the world's largest oil producer, and alternative and renewable energy sources make up a bit more of the world's energy mix.
“It's a very volatile, uncertain and frightening situation,” said Jason Bordoff, director of Columbia University's Center on Global Energy Policy. But, referring to the Persian Gulf, he said: “Among most of the parties, the United States, Europe, Iran and other Gulf states, it is not in anyone's interest for this conflict to expand significantly beyond Israel and Gaza. There is a recognition that this is the case,” he continued. ”
But Bordoff added that failures, poor communication and misunderstandings could lead to escalation even when countries don't want it.
And a significant and sustained decline in global oil supplies, for whatever reason, can simultaneously slow growth and increase inflation, a cursed combination known as stagflation.
