Global markets are facing sharply elevated uncertainty following the joint US and Israel strike on Iran, according to Daleep Singh, vice chair and chief global economist at PGIM, a global investment manager. PGIM offers a range of financial solutions for institutions, intermediaries and individual investors around the world. The company’s services include investment management, asset allocation and a variety of other financial products.
Singh stated that while the strike may achieve tactical gains, its strategic consequences remain unclear, leading investors to anticipate a wider range of potential outcomes. His central scenario involves a collapsed regime leading to internal conflict, which would exert moderate downward pressure on risk assets. However, a worst-case scenario, characterised by sustained resistance, could drive Brent crude prices above US$100 a barrel and trigger a flight to safe-haven assets.
He highlighted that regions dependent on oil imports would experience a classic supply shock. In contrast, the United States, as a net energy exporter, would largely mitigate the impact on its economic growth. Singh cautioned that prolonged conflict could lead to divergence in central bank policies and foreign exchange markets, underscoring the extensive and unpredictable economic repercussions of military action.
