I have noticed that discussions about the American economy are increasingly focusing on a specific topic: how much this war in Iran will really affect growth and inflation. Why is it important? Because US inflation data these days has become the most critical factor in understanding what the Fed will do.

Let's start with the numbers everyone is watching. In March, the consumer price index rose by 3.3% year-over-year, while core inflation (excluding energy and food) remained at 2.6%. These US inflation data show a still tense but improving situation. The point is: with the war pushing oil prices higher, inflationary pressure could reverse this positive trend.

Gasoline prices have already risen to $4.10 per gallon according to AAA. It seems high, but economists like Joseph Brusuelas of RSM say the real shock would only come if WTI reached $125 a barrel. Currently, we are at $91, below the recent peak of $115. So technically, we are still far from the "red zone," but uncertainty remains extremely high.

Here's the interesting point: despite consumer confidence being at its lowest since the 1950s, people continue to spend. In March, spending via credit and debit cards increased by 4.3% annually, the strongest rise in three years. Spending at gas stations rose by 16.5%. It’s a fascinating contradiction—the official US inflation data and actual consumer behavior do not match.

Mike Skordeles of Truist Advisory Services made me think when he said that uncertainty is the real problem, more than the war itself. And he’s right. The Federal Reserve remains in a wait-and-see stance, rate cuts are postponed, and mortgages continue to weigh on the economy. Goldman Sachs has already cut its GDP growth forecast to 2%, half a percentage point less than before.

Regarding US inflation data, there’s another thing I notice: the market is divided on future prospects. A survey by the New York Fed predicts inflation expectations at one year of 3.4%, while the University of Michigan says 4.8%. This gap is significant because it influences how investors position themselves.

Goldman Sachs expects the Fed to eventually proceed with more aggressive rate cuts in September and December, but the market bets on the first cut not before mid-2027. That’s a huge difference.

Globally, the impact will be even stronger. Europe and Asia depend much more on Middle Eastern energy, so this situation is even more critical for them. Supply chains are already under pressure—the New York Fed index has returned to its highest levels since January 2023.

The consensus among analysts is that the US economy will slow down but not collapse. However, everything depends on one variable: the duration of the conflict. If the ceasefire holds, inflationary pressure should gradually ease. If not, things could worsen significantly. For now, we are seeing more a price shock than a supply shock, but uncertainty remains the real enemy.