This is obviously a very fluid situation and as the facts on the ground evolve so too will the economic impact. As a framing, just bear in mind that, absent a prolonged war and major long-term disruptions to key shipping routes in the Strait of Hormuz, the impact on U.S. economic growth, inflation and monetary policy should remain modest. Of course, the opposite also could be true. Our model simulations of 10% and 30% sustained increases in oil prices do not come close to generating a U.S. recession or markedly changing the trajectory for core inflation. Headline inflation does move higher via higher energy prices ... (full story)