Goldman's top international execs say the Iran war has parallels to the Russia's invasion of Ukraine, but there are key differences | Fortune

"The parallels to the Russia/Ukraine shock from 2022 are very real, and that playbook is very much in our clients' minds. But in 2022, central bank rates were near historic lows, the global economy was still emerging from the pandemic, and a prolonged supply shock drove one of the worst inflation overshoots in a generation. This time, the starting point is different. Monetary policy in most economies is closer to neutral, and it's really then a function of how long this shock persists for."

"Goldman's base case: central banks won't respond hawkishly unless the conflict becomes protracted or energy markets face renewed pressure - a threshold that remains high. The firm's economists have already revised their scenario range upward on inflation and downward on growth. We're doing a lot of analysis really trying to compare the playbooks."

"The shock arrives at a particularly complicated moment for policymakers already wrestling with AI-driven labor market disruption. This also comes at a time that was already complicated for central bankers who are still trying to digest what's going to happen with artificial intelligence and labor markets."

Goldman Sachs' senior international executives Anthony Gutman and Kunal Shah addressed the impact of Middle East conflict on global markets, M&A activity, and the AI era. While acknowledging parallels to the 2022 Russia-Ukraine invasion, they emphasized critical differences in current conditions. In 2022, central bank rates were near historic lows and the global economy was emerging from pandemic disruption, creating conditions for severe inflation. Currently, monetary policy sits closer to neutral across most economies. Goldman's base case assumes central banks will maintain current policy unless the conflict becomes prolonged or energy markets experience renewed pressure—a threshold Shah indicated remains high. The firm's economists have adjusted scenario ranges upward for inflation and downward for growth. The conflict arrives during an already complex period for policymakers managing AI-driven labor market disruption.

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