CHARLOTTESVILLE, VA (CVILLE RIGHT NOW) – As tensions rise following recent U.S. military action against Iran, University of Virginia economics professor Dr. Ed Burton says the global markets are watching closely, but for now, remaining steady. “Everything depends on what Iran does next,” Burton said during an appearance on Morning News. He believes the most likely scenario is continued rhetoric and limited missile exchanges between Iran and Israel, which would leave markets relatively unaffected. 

However, Burton outlined a far more volatile possibility if Iran chooses to retaliate militarily. “Oil could go as high as 100 to 100 and a quarter,” he warned, noting that the closure of the Strait of Hormuz or attacks on U.S. troops in the region could cause a 30–35% spike in oil prices. That would lead to higher gas prices, short-term inflation, and a likely economic slowdown across the U.S. and Europe. 

Burton added that if energy prices soar, central banks may intervene by pushing interest rates down to support slowing economies. But such action could trigger inflation later. “The real threat is not inflation from that, the real threat is an economic slowdown,” he said. For now, Burton bets on a more restrained Iranian response, keeping markets calm, but he cautioned that the situation could change quickly. 

Listen to the full conversation here: