Goldman Sachs The Markets
How geopolitical instability is affecting markets
Feb 2, 2024
The podcast discusses the economic impacts of rising geopolitical instability, focusing on the effects on global markets and the global economy. It analyzes the recent drone strike in Jordan, explores market reactions to geopolitical tensions, and discusses the implications of low oil prices. The podcast also expresses concern about rising debt levels and the axis of destabilization formed by Iran, North Korea, and Russia.
09:57
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Quick takeaways
- Geopolitical instability in the Middle East poses challenges in constraining Iran's actions and escalating conflicts through supporting proxy groups.
- Markets primarily focus on macroeconomic factors like the U.S. election, U.S.-China relations, growth and inflation outlook, rather than localized geopolitical tensions in the Middle East.
Deep dives
Escalation of Proxy Activities in the Middle East
Jared Cohen explains that Iran is destabilizing the region by supporting different proxy groups such as the Houthis in Yemen, Hezbollah in Lebanon, and Shia Arab militias in Iraq. This escalating conflict poses challenges in identifying meaningful red lines to constrain Iran's actions. The recent drone strike on U.S. troops in Jordan is seen as another escalation. The attack targeted a crucial land corridor connecting Syria, Jordan, and Iraq, facilitating the transport of resources and weapons to Hezbollah and Syrian proxies.
