The threat to the global economy from the Israel-Hamas war

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The threat to the global economy from the Israel-Hamas war

A massive explosion at a Gaza City hospital on October 17 killed hundreds of people, with Israel and Hamas trading blame. The event also resulted in US President Joe Biden’s visit to the region, where he had originally planned to meet with Israeli and Arab leaders about containing the conflict and providing aid to civilians in Gaza. considerably more difficult. The meeting with Arab leaders was canceled in light of the attack. On Wednesday, Biden appeared to bring relief to Palestinians caught in the crossfire, while U.S. intelligence officials said their preliminary data did not suggest Israel was responsible for the destruction of the hospital. So where are the efforts of Biden and other Western leaders to prevent an escalation of the conflict that has killed thousands on both sides in just 11 days? On this week’s “In the City,” hosts Francine Lacqua, David Merritt and Allegra Stratton, along with Bloomberg News Director Rosalind Mathieson, try to answer that question. “You sense the growing concern of the US president and many others about what is happening in Gaza – the humanitarian catastrophe that is unfolding there – but also the possibility of this conflict spreading,” Mathieson says. “That it spirals across the region and causes a really, really massive catastrophe.” They also discuss research from Bloomberg Economics that examines how a major war could plunge the global economy into recession. “You see the markets waking up to this situation and posing significant geopolitical risk,” she explains. “Geopolitics is impacting global markets and the political risk there is increasing.” The oil market is already reacting and bringing higher oil prices back into play, warns Mathieson. “If you think about the environment we’re in, where inflation is still high, the idea that central banks need to keep interest rates higher for longer could have a significant impact on the global economy.”

Oct 18, 2023

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