It's hard to see how the Iran war ends, says Evercore's Roger Altman

Well, thanks for having me, Becky. I think there are two colliding crosscurrents flowing through financial markets right now. One is that before this conflict began, the US economy was really quite solid. Consumer spending was strong, maybe K-shaped but strong. Fixed investment was strong driven by AI-related spending. Access to financing was good. Corporate profits were strong, inflation and interest rates were ticking down, and equity markets were strong and so were fixed income markets. So starting from a strong base. On the other side, the Iran war is an unpredictable wild card. Most macro forecasters have built in about a 30-day conflict in terms of their duration assumption and therefore haven't adjusted their forecast much, which is one of the reasons why equities, as you just said, aren't all that weak. But here we are with the Strait of Hormuz closed. Yes, one or two random vessels have passed through it, but it's essentially closed. 20% of the world's oil exports pass through it. And it seems to me that it's going to be hard to reopen it. My understanding is that from a military point of view, it would be hard for the US to unilaterally do that. The strait is narrow. The Iranians have a lot of small mobile weaponry, shoulder-fired missiles, small boats with machine guns and so forth that can be easily hidden. And I've been told by people who know a lot more than I do that it would be quite hard for us to just march in and open it. And alternatively, if President Trump just declares victory and pulls out, what incentive does Iran have to reward us by reopening it? That's not clear to me. So, I think we're going to need a ceasefire agreement. And the question is, what could we offer Iran which could achieve that? Because at the moment, their view is we can sustain the pain, however damaged, however brutalized we've been, longer than America can. And that's their strategy. And of course, they've regionalized the conflict by attacking the UAE and Kuwait and Dubai. I'm sorry, the UAE, Kuwait, by Iran and so forth. So, it's hard to see how this ends. But I think the good news is the US economy is a huge and very resilient thing. It's not particularly import-sensitive, which is why tariffs haven't had much effect, and it's not particularly oil-sensitive. We're a net exporter as everybody knows, and the data I've seen shows that US consumers spend a relatively small amount of disposable income on gasoline, below 5%. So it's going to be hard for this by itself to really damage the US economy. But right now you've got all this uncertainty. But if the war does end soon and oil supplies return to their pre-war levels soon, I think the US economy will end the year in good shape, oil will be 70 or below. The average gasoline price that Americans would have paid will maybe be 25 cents higher than it otherwise would have been and we'll be fine.

It's only at the point where I thought myself that it was going to truly impact economic business and economic conditions. And we're not at that point. It may take us two months, three months before I think that might really become evident and it's unlikely the conflict will extend that long, but at the moment we just don't know.