Mission Driven

We hold out hope that the ceasefire in Iran will lead to a lasting truce. Even in this best-case scenario, supply disruptions in markets including oil, gas, fertilizer, helium, plastics and aluminum will take months to recover from.

For the U.S., the primary economic risk of the war remains inflation: energy prices have jumped, with room to climb further. Other supply chain disruptions may lead to higher prices for food and manufactured goods. And the most recent inflationary cycle taught us that once inflation ascends, it can be slow to settle.

Higher costs can cut into overall spending. Material shortages may also impair consumption and efforts to reshore production. The sooner that hostilities are wound down, the more likely that these outcomes can be avoided.

Despite this new source of uncertainty, we do not anticipate a significant slowdown in activity. The economy has shown considerable resilience during this decade; favorable market outcomes will continue to propel spending, and AI-related investment remains a force. Following are our thoughts on the outlook for the domestic economy.

KEY ECONOMIC INDICATORS