A potential military conflict with Iran could deliver a $300 billion economic shock to the United States, according to new analysis. The impact would drive up mortgage rates and squeeze household wages.
Higher energy prices would be the primary transmission mechanism. A sustained oil price spike would raise costs across the economy.
Mortgage rates would climb as inflation expectations increase. Borrowers would face steeper monthly payments for homes and refinancing.
Wage growth would stall as businesses grapple with higher input costs. Employers would struggle to maintain payrolls in a higher-cost environment.
The economic blow would hit American households directly. Energy expenses would consume a larger share of disposable income.
The administration and Congress have options to mitigate the fallout. Policy measures could focus on stabilizing energy markets and boosting domestic supply.
Action now could reduce the severity of the shock. Lower energy costs would help keep mortgages affordable and support wage growth.
Timely intervention remains critical to avoid the projected economic damage. Policymakers face a narrow window to act before conditions worsen.
