FX.co ★ Wolfe Research: US economy may withstand prolonged stalemate with Iran

The stalemate of "neither war nor peace" between the United States and Iran solidified after the expiry of a framework ceasefire memorandum. Wolfe Research analysts, including Tobin Marcus and Chutong Zhu, have concluded that the US economy is able to withstand the pressure from current oil prices. They estimate that ongoing hidden supplies of crude from the Persian Gulf allow prices to remain elevated but not catastrophic for the US market.

The geopolitical situation around the strategic Strait of Hormuz remains highly tense. Tehran said it had moved to a "fully offensive" posture, and shipping through the strait has effectively stopped. According to the UK maritime agency UKMTO, a merchant vessel exiting the waterway suffered engine room damage after being struck by a projectile. At the same time, President Donald Trump declined to renew the memorandum, hinting at the existence of a back channel with the IRGC, a claim denied by Iran, and he warned Omani authorities against separate arrangements with Tehran.

Against the backdrop of the escalation, Brent futures rose above $90 a barrel, reviving concerns about faster inflation and tighter central bank policy. Nevertheless, Wolfe Research emphasizes that inflation expectations in the United States remain stable, and short‑term Treasury yields have adjusted lower following the Fed’s July meeting. Analysts note that current disruptions to energy supplies have so far not inflicted destructive damage on the US Treasury market or the consumer sector.