How is the prolonged Middle East conflict and closure of the Strait of Hormuz affecting the US economic outlook, particularly inflation and growth?

The prolonged Middle East conflict and effective closure of the Strait of Hormuz are increasing pressure on the US growth outlook by pushing up energy costs, raising CPI inflation to an expected average of 3.1% for the year—up from 2025 but down from 4.1% in 2023 and 8.0% in 2022—though still above the Fed’s target; March CPI reached +3.3% due to the conflict, with inflation projected to soften to 2.3% by 2027, while longer conflict duration risks more severe economic scarring.

What does the latest data say about US labor market resilience and consumer financial health amid ongoing inflation concerns?

The US labor market is proving resilient, with March employment results above expectations and a 'low hire, low fire' dynamic indicating balance; wages and salaries continue to outpace inflation, supporting stable real incomes, although consumer confidence remains low due to persistent inflation and job concerns.

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