Firm: Oil spike won't trigger sustained US inflation

US stocks have dropped and oil prices have spiked in the week since the Iran war kicked off. Oil prices are up about 50% since mid-February as US and Israeli strikes on Iran have disrupted global oil supplies, with Iran closing the Strait of Hormuz. As a result, Pantheon Macroeconomics said in a note to clients on Monday that US consumers can soon expect gas prices to rise to around $4 per gallon, up from $3 at the start of March.

The firm warned any surge in inflation will be short-lived because the US labor market is too weak to sustain a major spike. "In the near term, the Fed will wait to see if the jump in energy prices has broader consequences for inflation," wrote Samuel Tombs, the chief US economist at the firm.

United States

oil prices, us inflation, pantheon macroeconomics, gas prices, hormuz, iran war, labor market, federal reserve, samuel tombs, israeli strikes