Beyond consensus: Economic conditions amid conflict

Geopolitical conflict has raised the risk of a stagflationary backdrop, with higher energy prices likely to slow U.S. growth more than they lift core inflation.

Even so, the economy still looks resilient, and a recession is not the base case unless tensions worsen further or oil stays elevated for longer.

The bigger medium-term story may be productivity, as AI-driven gains could support stronger growth, protect margins, and ease inflation pressure over time.

The labor market remains stable but vulnerable to slower hiring and selective AI-related disruption, which could soften consumer demand if uncertainty persists.

For investors, diversification and attention to downside risk remain important as geopolitics, tariffs and policy shifts continue to shape markets.