{"id":1719,"date":"2023-10-17T17:42:16","date_gmt":"2023-10-17T17:42:16","guid":{"rendered":"https:\/\/connectwithfund.com\/business\/why-fed-officials-arent-addressing-the-israel-hamas-war-the-way-they-did-with-ukraine\/"},"modified":"2023-10-17T17:42:17","modified_gmt":"2023-10-17T17:42:17","slug":"why-fed-officials-arent-addressing-the-israel-hamas-war-the-way-they-did-with-ukraine","status":"publish","type":"post","link":"https:\/\/connectwithfund.com\/?p=1719","title":{"rendered":"Why Fed officials aren\u2019t addressing the Israel-Hamas war the way they did with Ukraine"},"content":{"rendered":"
\n

\n When war broke out in Ukraine last year, Federal Reserve officials were quick to speak about it.\n <\/p>\n

\n \u201cLet me comment on what I think is on everyone\u2019s minds today: Russia\u2019s attack on Ukraine,\u201d Fed Governor Chris Waller said on February 24, 2022, hours after Russia invaded Ukraine.\n <\/p>\n

\n \u201cObviously, there are people in harm\u2019s way and we shouldn\u2019t lose sight of them. It is far too early to judge how this conflict will affect the world, or the world economy, and what the implications will be for the US economy,\u201d Waller said.\n <\/p>\n

\n Now, there\u2019s another war going on, between Israel and Hamas.\n <\/p>\n

\n Yet in Waller\u2019s first public appearance after Hamas invaded Israel last weekend, he did not acknowledge the tragedies that have unfolded.\n <\/p>\n

\n In his second appearance since the war broke out, he said he doesn\u2019t think there is a strong chance it will hurt the US economy unless there\u2019s a major spillover effect that chills business and consumer sentiment.\n <\/p>\n

\n Fed Vice Chairs Michael Barr and Philip Jefferson, Fed Governor Michelle Bowman and Dallas Fed President Lorie Logan all made public remarks last week. None made mention of the war in Israel.\n <\/p>\n

\n Emma Jones, a spokesperson for the Fed, declined to comment on why many Fed officials, who in the past moved swiftly to acknowledge the war in Ukraine, weren\u2019t addressing the war in Israel.\n <\/p>\n

\n That shouldn\u2019t be the case, James Dorn, a Fed policy expert and a senior fellow at the libertarian-leaning Cato Institute, told CNN. \u201cThe Fed addresses climate change and diversity, you\u2019d think they ought to address the seriousness of what\u2019s going on in the Middle East,\u201d he said.\n <\/p>\n

\n There are some Fed officials who are starting to talk about it, though \u2014 albeit only when asked questions.\n <\/p>\n

\n Atlanta Fed President Raphael Bostic was the first to speak about the war, at the American Bankers Association\u2019s annual conference last Tuesday.\n <\/p>\n

\n \u201cMy heart goes out to everyone who has been adversely affected by that situation,\u201d he said, adding that, \u201cit\u2019s really troublesome.\u201d\n <\/p>\n

\n With regard to how the conflict will impact both the US and the global economy, Bostic said \u201cthis is just another new, unexpected thing that is going to cause everyone to have to rethink where our markets are going to be, where our partners are going to be.\u201d\n <\/p>\n

\n During a moderated discussion at Minot State University in North Dakota last week, Minneapolis Fed President Neel Kashkari didn\u2019t address the conflict until the very end.\n <\/p>\n

\n \u201cThe first mechanism by which geopolitical events \u2014 whether it\u2019s Russia invading Ukraine, or the Hamas attack on Israel \u2014 <\/strong>affect the economy\u2026 is through commodity markets, through oil prices, first and foremost, but through other commodity markets as well,\u201d he said.\n <\/p>\n

\n \u201cWe saw huge price moves when Russia invaded Ukraine, so far much more muted moves around what\u2019s happening in Israel,\u201d he added.\n <\/p>\n

\n
\n <\/source><\/source><\/source><\/picture>\n <\/div>\n<\/div>\n

\n Kashkari labeled the conflict a \u201chuman tragedy.\u201d\n <\/p>\n

\n Boston Fed President Susan Collins said that, \u201cgiven the size of the US economy,\u201d it is generally much more resilient to global shocks.\n <\/p>\n

\n \u201cMany of the impacts of the horrific events and what we\u2019re seeing at the moment are beyond the economic ones,\u201d Collins said during an event hosted at Wellesley College last Wednesday. Nevertheless, the conflict is something the Fed will take into account in its models that help officials make policy decisions, she said.\n <\/p>\n

\n Philadelphia Fed President Patrick Harker said the US economy can still achieve a soft landing, a scenario where inflation retreats without pushing the economy into a recession.\n <\/p>\n

\n \u201cNow there\u2019s a huge caveat that we\u2019ve been hit time after time with shocks \u2014 proverbial \u2018black swans\u2019 that come out of left field that we don\u2019t expect,\u201d he said on Friday at an event hosted by the Delaware State Chamber of Commerce.\n <\/p>\n

\n The war in Ukraine was one of those, he noted, and now it\u2019s \u201cthis horrible situation we\u2019re seeing in Israel and the Middle East more broadly.\u201d\n <\/p>\n

\n It\u2019s unclear if the Israel-Hamas war will \u201cmore broadly\u201d impact the global economy, Harker said.\n <\/p>\n

\n While it may be true that a war between Israel and Hamas alone may not amount to much for the US economy, there\u2019s a significant and growing risk it will escalate to a multinational war potentially involving Iran, Lebanon and Syria given the recent tensions among those nations.\n <\/p>\n

\n JPMorgan Chase CEO Jamie Dimon isn\u2019t treating that lightly.\n <\/p>\n

\n \u201cNow may be the most dangerous time the world has seen in decades,\u201d he said on the bank\u2019s third-quarter earnings call last week. The war, he said, \u201cmay have far-reaching impacts on energy and food markets, global trade and geopolitical relationships.\u201d\n <\/p>\n

\n Dorn of the Cato Institute said Fed officials \u201chave to think about the economic implications of this.\u201d\n <\/p>\n

\n One threat to the economy is if more countries \u2014 including the United States \u2014 impose stricter embargoes on Iranian oil. US sanctions on Iran are supposed to prevent Iranian oil from being sold in the United States, but traders have been able to find loopholes to get around it in the past.\n <\/p>\n

\n Even so, Iran\u2019s influence on the global oil market is limited. According to Kpler data, the country exported only about 1.4 million barrels a day of crude in the third quarter, accounting for a maximum of 1.4% of global supply.\n <\/p>\n

\n By comparison, Russia was the world\u2019s second-largest oil producer in 2021, according to Rystad Energy data. That\u2019s why there was a much more immediate spike in gas prices across the globe after a slew of countries banned Russian oil imports after the invasion of Ukraine.\n <\/p>\n

\n That\u2019s probably why more Fed officials were quicker to acknowledge the war in Ukraine, Dorn said. But there\u2019s more to it than that, he said.\n <\/p>\n

\n \u201cThis is a much more emotional thing for a lot of people,\u201d he said, referring to the war taking place in Israel and Gaza, whereas Ukraine had a lot of bipartisan support initially. \u201cI don\u2019t think the Fed wants to look like they\u2019re taking sides,\u201d Dorn added \u2014 but said Fed officials could easily talk about it without looking partial.\n <\/p>\n

\n There\u2019s also a more substantial risk that a multinational war spills over into the Strait of Hormuz, a narrow waterway off Iran\u2019s southern border through which 37% of global seaborne oil exports travel each day.\n <\/p>\n

\n Any surge in oil prices that results from the war \u201cwould likely lead to more demand destruction than in 2022 when the economy was fiscally stimulated,\u201d said Gregory Daco, chief economist at EY-Parthenon.\n <\/p>\n

\n Higher gas prices, which are likely to cause consumers to cut back on spending in other areas, combined with the impact of all of the Fed\u2019s rate hikes since March 2022, could cause the central bank to rethink further rate hikes entirely, Daco said.\n <\/p>\n<\/p><\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

When war broke out in Ukraine last year, Federal Reserve officials were quick to speak about it. \u201cLet me comment on what I think is on everyone\u2019s minds today: Russia\u2019s attack on Ukraine,\u201d Fed Governor Chris Waller said on February 24, 2022, hours after Russia invaded Ukraine. \u201cObviously, there are people in harm\u2019s way and we shouldn\u2019t lose sight of them. It is far too early to judge how this conflict will affect the world, or the world economy, and what the implications will be for the US economy,\u201d Waller said. Now, there\u2019s another war going on, between Israel and<\/p>\n","protected":false},"author":1,"featured_media":1720,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[36],"tags":[],"class_list":["post-1719","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"yoast_head":"\nWhy Fed officials aren\u2019t addressing the Israel-Hamas war the way they did with Ukraine | ConnectWithFund<\/title>\n<meta name=\"description\" content=\"When war broke out in Ukraine last year, Federal Reserve officials were quick to speak about it. \u201cLet me comment on what I think is on everyone\u2019s minds\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/connectwithfund.com\/?p=1719\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta 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