Two prominent economists say the US-Israel war on Iran, now in its sixth month, remains a serious background risk for markets and the Chinese economy even as other issues dominate economic debate.
Mao Zhenhua, co-director of Renmin University's Institute of Economic Research and a professor at the University of Hong Kong, said Chinese policymakers are weighing two especially thorny questions: how much longer the conflict might last, and whether it will force adjustments to their previous plans. He said the continuing impact on China might remain small.
Torsten Slok, chief economist at Apollo, said that while artificial intelligence and the Federal Reserve are more at the forefront of the economic conversation, the risk from the Iran war and its impact on fuel stores remains an important factor in the background. Slok also said that even if the Fed holds fewer meetings, markets will still try to price in the central bank's moves regardless of the schedule.