by Kim Khan
Seeking Alpha
The jump in oil prices following Israel’s strikes on Iran could exacerbate U.S. stagflationary conditions if they persist, according to Apollo Global Management.
Oil prices rallied more than 7% in Friday’s session, the biggest one-day rise in three years.
“According to the Fed’s model of the US economy, a sustained $10 increase in oil prices is expected to increase inflation by 0.4% (including secondary effects) and lower GDP by 0.4%,” Chief Economist Torsten Slok said.
WTI is up more than $10 from its lows at the end of May.
“Tariffs also increase inflation and lower GDP growth,” he said. “Restrictions on immigration also increase wage inflation and lower employment growth.”