On The Market If Iran Conflict Continues, Dangerous Economic Side Effects Could Follow
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Jun 26, 2025 Explore the complex impact of military conflict on the U.S. economy and housing market. From potential oil price surges to inflation and interest rate fluctuations, the discussion delves into how recent tensions in the Middle East could reshape real estate investments. Increased military spending may boost GDP short-term, but escalating national debt poses long-term risks. Real estate investors need to brace for possible market changes amid geopolitical uncertainties and adjust their strategies accordingly.
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Complexity of War Economic Impact
- Military conflicts in today's US context vary greatly, making historical economic impact comparisons challenging.
- Current macroeconomic conditions and the nature of warfare influence economic consequences more than past wars do.
Proxy War and Economic Risks
- A proxy war scenario where the US supports financially could increase national debt and raise inflation risks.
- This might push up bond yields and mortgage rates, potentially hurting the housing market over the long term.
War Raises Taxes and Spending
- Prolonged direct war leads to significant deficit spending and likely tax increases.
- Historically, US wars increased taxes to fund conflict, making tax cuts during war unlikely and fiscally risky.