The war in Iran could very quickly turn bad for Americans at home if it continues, economist Steve Rattner warned Mike Barnicle on MS NOW Wednesday morning.
"Wall Street clearlydoes not like unpredictabilityor uncertainty. No one does," said Barnicle. "But on the global stage,there's no way of telling howlong we will be activelyinvolved on a daily basis in awar in Iran. What happens ifthis war lengthens out in termsof the United States presenceand participation in that war? What happens to those chartsbehind you right now?"
"A lot of bad things, Mike. Alot of bad things," said Rattner.
For one thing, he said, "The oilprices could spike some more.As I said, I don't think itaffects our supply, but itaffects the prices people payat the pump and for their homeheating oil and even for theirnatural gas, because a lot ofnatural gas also passes throughthe Strait of Hormuz. And sothen you get more inflation,you get the potential forhigher interest rates, you getthe uncertainty and the fear ofwhat could happen. And yeah,all that is really bad for thestock market."
"The stockmarket's reaction so far hasactually been quite muted," he added. "Itwas down about 1 percent yesterday. Itlooks like it will open aboutflat today. That's a prettybenign reaction, giveneverything that could havehappened. But the potential fora much bigger stock marketdisruption is certainly rightthere. If this war were towiden out, or if somethingunexpectedly bad were to happento us, to our troops, to thewhole Middle Eastern situation."
This comes as the invasion divides President Donald Trump's own base, with many who believed he was the candidate against "forever wars" seeing it as a betrayal or even calling for his removal from office.