In light of the recent conflict between Israel and Hamas, U.S. Treasury Secretary Janet Yellen and other top financial leaders expressed concerns about the impact on the global economy. The attacks launched by Hamas have added an extra layer of risk to an already uncertain economic outlook, though the United States remains cautiously optimistic.
Yellen, along with several other financial experts, strongly condemned the recent large-scale incursion into Israel by Hamas. The United States pledged unwavering support for Israel during this crisis.
“The world has become more shock-prone, with increased risks to growth, development, jobs, and living standards that widen inequalities within and across countries,” said the IMF and World Bank in a “Marrakech Proclamation.”
Despite these concerns, Yellen emphasized that funding for Ukraine and support for Israel remained top priorities for the Biden administration. This reassurance aimed to alleviate fears that resources urgently needed by Ukraine would be diverted due to the Gaza conflict.
While crude oil prices surged and safe-haven currencies saw an uptick, Yellen downplayed the potential for the Gaza conflict to significantly impact the global economy. She expressed hope for a soft landing for the U.S. economy, citing factors such as labor market resilience and moderating wage pressures.
Yellen also addressed the possibility of new sanctions on Iran and the $6 billion in Iranian funds unfrozen as part of a U.S.-Iran prisoner swap in September. She stressed that the funds had not yet been accessed and that Washington was keeping its options open in response to the situation.
The economic landscape remains uncertain, and the impact of the Gaza conflict continues to unfold.