Donald Trump says he will decide “within the next two weeks” whether the US will attack Iran. As the Israel-Iran conflict grinds into its second week, there is growing concern it could choke global energy supplies and with it reignite inflation and increase the risk of a global recession. At the same time the US Federal Reserve Chair Jerome Powell sounded another warning on the rising risks of stagflation, as the US growth outlook dims and risks to the inflation outlook grow. Eric Fine, portfolio manager at Van Eck, says America is most at risk of stagflation arising from global developments. He says the implications from the uncertainty created by the conflict in the Middle East and the erratic US trade policies are likely higher US interest rates and that could trigger a recession in developed markets. The Australian share market recorded its first weekly decline in six weeks, as nerves around the global economy become a dominant theme. Bruce Apted, head of portfolio management at State Street Australia, says valuations on the market are at very high levels, so the risk continues to be to the downside.
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