Goldman Sachs cites stable oil inventories and AI-driven market gains as key factors offsetting geopolitical pressures from the Iran war.
The global economy remains resilient despite nearly four months of conflict in Iran, according to Goldman Sachs. Chief economist Jan Hatzius noted that while risks persist, markets have avoided significant disruption due to three factors: limited oil price surges, manageable demand adjustments, and strong AI-driven equity performance.
Oil markets have not rallied as feared, supported by high pre-war inventories. Regional shortages, such as jet fuel, have been mitigated by reduced flight schedules on less critical routes. Meanwhile, fiscal policy and AI-related growth have sustained the S&P 500 and Nasdaq rallies, despite a slower start to the year.
However, Goldman’s 12-month recession probability remains 5% above prewar levels. Economists warn of a potential consumer spending slowdown as tax refunds dwindle, gas prices rise, and wage growth decelerates.