Bank of America analysts say the Iran conflict poses limited near-term risk to the U.S. economy, though energy prices could amplify the impact if they surge sharply. Aditya Bhave of BofA told investors that historical precedent suggests the economic fallout may remain contained, but warned that a large and persistent energy price shock could ripple through consumer spending and investment.

BofA identifies several channels through which higher oil prices could affect the economy, including weaker spending across income groups and potential AI capital expenditure bottlenecks. The bank also notes that rising energy costs could influence Federal Reserve policy, keeping the central bank cautious in the near term. Bhave wrote that higher oil prices should keep the Fed firmly on hold for now.

The analysis comes as markets watch for upcoming inflation data, with BofA expecting February consumer prices to rise modestly. The bank projects both headline and core CPI to increase 0.3% month-over-month. While the immediate economic impact appears limited, BofA emphasizes that the situation could shift if energy costs begin weighing more heavily on demand, potentially forcing the Fed to adopt a more dovish stance in the medium term.