Airstrike that killed Iran's top general not bad for financial markets ... yet
The U.S. drone attack at Baghdad's international airport that killed Iran’s top general Qassem Soleimani won’t cause a financial market crisis as long as the conflict between the two countries doesn’t escalate, a billionaire investor told FOX Business' Gerry Baker on WSJ at Large.
“You'll have volatility, and that’s fine,” chairman and CEO of the Avenue Capital Group hedge fund Marc Lasry said. “But at the end of the day ... it’s really the economy. So if the economy is doing fine, which I think it is, the markets will be fine.”
READ: DEPARTMENT OF DEFENSE STATEMENT ON SOLEIMANI KILLING
Oil spiked and stocks dropped following the killing of Soleimani who President Trump said was planning attacks on U.S. personnel in Iraq and in the Middle East and was behind the killing of hundreds of Americans in previous terrorist acts. The lack of market response to the news didn't surprise Lasry.
“They’re calm because they don’t know what’s going to happen,” Lasry said. “I think if there’s events which lead to Americans dying, and then, you know, where does it go? Does it stay where it is or does it keep escalating? Then, I think the markets will get extremely nervous about that.”
MIDEAST TENSIONS IN THE PAST HAVE MOVED MARKETS, U.S. ECONOMY
Lasry said, at this juncture, he doesn’t see geopolitical events similar to this U.S.-Iran conflict as having that much of an effect on the financial world.
“I don’t think they will unless oil prices stay high,” he said. “Then, you’ll have a real impact.”
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The reason? Higher oil prices hurt consumer spending.
“This economy is driven by the consumer,” Lasry said. “So, I think if you end up having oil ... around $55, $65 [a barrel], it’s fine. I think if it gets above that, I think it starts having an impact on consumers.”
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