Boston Fed research, reported by Axios, finds an Iran-scale oil shock would
materially boost inflation but have negligible effect on national employment.
Researchers estimate a US–Iran conflict could lift oil prices about
33%—historically large but not unprecedented—and say the modern US economy is
structurally better able to absorb that shock with far less employment damage
than in the 1970s. They concluded that if energy supply disruptions pose limited
employment risk, the Fed’s policy challenge shifts from managing stagflation to
preventing renewed price pressures.
