$330,000 bet on a US attack on Iran by Polymarket users highlights market anxiety, driving oil prices up 13% to $82 per barrel since the strike. This spike, the highest since July 2024, pressures Treasuries and stocks, raising inflation fears. Analysts warn prolonged conflict could significantly worsen economic impacts.

If the war is short-lived, the GDP drag from higher oil prices should be modest, reducing growth by just a few tenths of a percentage point. However, a sustained surge to $100 per barrel could elevate core CPI by four basis points and headline CPI by 28 basis points, according to Goldman Sachs. This would amplify inflation risks, especially in goods and services prices, as noted by EY-Parthenon’s Gregory Daco.

The conflict adds to recent supply shocks, potentially compounding inflation pressures consumers and businesses already concerned about price stability. While long-term interest rate expectations remain low, current high rates may represent a temporary deviation driven by short-term factors like government solvency fears or inflation hangover, per economists Verónica Bäcker Peral, Jonathon Hazell, and Atif Mian. The key takeaway is the significant near-term economic vulnerability to oil price volatility.