A West Asia conflict fueled by U.S.-Israeli actions and Iran’s retaliation is driving oil prices up, threatening U.S. inflation and global markets.

A prolonged conflict in West Asia, sparked by US-Israeli actions and Iran's retaliation, is raising concerns about global economic stability, with Morgan Stanley predicting higher inflation and market volatility in the United States. due to elevated oil prices, which may push the U.S. Each 10% increase in oil prices raises inflation by 0.35% over three months. The conflict could also increase defense spending to $1.5 trillion, strain the federal debt, and influence midterm elections. Rising oil prices and regional tensions in India have disrupted exports, increased inflation risks, and contributed to market declines, despite the fact that inflation is under control. The RBI is expected to keep interest rates low to support growth, while experts emphasize the importance of coordinated policies in maintaining India's 7%+ growth rate and mitigating risks from energy supply shocks and remittance pressures.