Discussion Paper
What Businesses Are Saying: The Impact of the Conflict Has Been Limited ... For Now
Abstract: Overall Momentum: Did the Conflict Cause Businesses or Consumers to Pull Back? Firms demonstrated patience amid uncertainty. Business leaders shared that increased policy uncertainty over the last year had taught them to calmly wait and see. This meant paused investments for some, as they waited to see how the conflict would impact supply chains, input costs and demand. Consumers continued to show resilience. Firms flagged a few cases of stress among middle-income consumers. Beyond that, however, firms were surprised at the lack of demand response to the conflict in the Middle East. Consumers kept spending even as they faced sharp price increases at the gas pump. These reports came from firms across sectors: retail, travel, manufacturing and banking. Some firms posited that larger tax refunds may have cushioned extra expenses. Big-ticket items like washers and dryers, which often reflect consumer confidence, saw negative impact. There were also a few reports of homebuying deals that fell through.
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https://www.richmondfed.org/region_communities/regional_data_analysis/regional_matters/2026/what_businesses_are_saying_impact_conflict_limited_for_now
Description: discussion paper
Bibliographic Information
Provider: Federal Reserve Bank of Richmond
Part of Series: Regional Matters
Publication Date: 2026-05-01