Climate Change Impacts on Ports; Managing AI Costs; and June Economic Outlook

The Israel-Iran conflict has elicited a muted response from commodity and financial markets, with Dated Brent crude priced at about $76 per barrel — an $8 increase from the average prior to initial missile strikes. While the impact on major equity indexes and safe-haven assets like gold and the Swiss franc has been limited, any escalation could significantly disrupt energy supply, particularly if the Strait of Hormuz were to close, leading to substantial output losses in the Middle East, Asia-Pacific and Europe.

Even without conflict escalation, the strength of first-quarter growth rates is expected to fade. Recent forecasts show raised real GDP growth projections for 2025–26 across many economies, reflecting improved financial conditions. However, growth rates for this year and the next are anticipated to remain below potential, falling short of pre-November 2024 election levels as the initial boost from higher tariffs begins to unwind.

Learn more with data from the Purchasing Managers’ Index.