June 23, 2025 – What will the escalating conflict between the United States and Iran mean for the U.S. economy? Construction-materials Economist Ed Sullivan, author of The Sullivan Report, wrote, “Much is dependent on Iran’s reaction. The impacts are much different if Iran reaches out quickly for the negotiating table compared to that of a path toward prolonged retribution. If it opts for the negotiating table quickly, the incremental adverse impacts on the U.S. economy are likely to be temporary and muted. In that case, the slowly weakening economy may be able to sidestep a recession. If Iran opts for prolonged retribution, the type and geographic location of those actions play key roles in adverse impact on the U.S. economy.
“No one knows what Iran’s full response will be. The initial reports are not encouraging. Less than a day after the bombings, Iran announced it will close the Strait of Hormuz. Iran has also threatened to target U.S. military assets in the region. These actions mark a serious escalation in the conflict. These actions also carry significant adverse economic impacts for an economy already on edge.”
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