Impact of Israel-Hamas war on economy not yet known: Janet Yellen

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UBS managing director and senior portfolio manager Jason Katz discusses whether the U.S. stock market is ignoring the threat of a wider Middle East war on 'Varney & Co.'

Treasury Secretary Janet Yellen said Monday that it’s too early to speculate about the economic consequences of Israel’s war with Hamas, saying the impact will depend on whether the conflict spreads to the wider Middle East.

Gaza-based Hamas launched a terror attack on Israel on Oct. 7 that killed at least 1,400 Israeli civilians and soldiers and 30 Americans. Israel Defense Forces (IDF) are preparing a ground assault aimed at dismantling Hamas’ ability to operate from the Gaza Strip, while both Iran and its Lebanon-based proxy Hezbollah have threatened to enter the conflict on the side of Hamas, which also receives funding and other support from Iran.

«We’re looking at the potential economic implications of the hostilities, although our main thoughts are with the Israeli people for what they’ve suffered. I think It’s too early to speculate on whether or not there will be significant consequences,» Yellen told Sky News.

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Treasury Secretary Janet Yellen said the economic toll of war in the Middle East will depend on whether it spreads beyond Israel and Gaza. (Chung Sung-Jun/Getty Images / Getty Images)

«I think importantly it depends on whether the hostilities extend beyond Israel and Gaza, and that’s certainly an outcome we would like to avoid,» she added. «I think it’s very early days and we’re monitoring the situation at this point.»

Yellen noted that energy markets have seen a slight uptick in prices following Hamas’ terror attack, although oil and gas prices haven’t