Business community shocked and outraged by attack on Israel—and worried about the knock-on effects
The attack on Israel this weekend sent shockwaves around the world, prompting world leaders to weigh in on the rapidly evolving conflict. Also watching the turmoil were prominent figures in the business community, many of whom shared their insights and reactions.
Hedge fund billionaire Bill Ackman, who heads Pershing Square Capital, criticized President Joe Biden and previous administrations for poor leadership. He lamented in an X post that the U.S. “did nothing” in response to Russia’s invasion of Crimea in 2014, “abandoned Afghanistan in a sloppy withdrawal” in 2021, and most recently took Ukraine “out of the budget to keep the government temporarily open.”
He added: “Why did Hamas invade Israel last night? Because the United States has consistently not kept its word on its foreign policy commitments and we look very weak. Terrorism loves a leadership vacuum and we have created one.”
Tesla CEO Elon Musk, who has faced accusations of amplifying antisemitic voices on X, wrote of the attack: “Sorry to see what’s happening in Israel. I hope there can be peace one day.”
Musk directed attention to Iran, which backs Hamas, the Palestinian militant group that attacked Israel. “[Supreme Leader Ayatollah Ali] Khamenei’s official position is clear that the eradication of Israel is the actual goal, not just supporting Palestinians,” he wrote on Sunday. “That will not happen. All that actually happens, decade after decade, is a never-ending cycle of violence and vengeance. Stoking the fires of hatred isn’t working. Perhaps it is time to consider something else.”
Jacob Helberg, who previously led Google’s policy efforts and is now at the Center for Strategic and International Studies, wrote: “Make no mistake: the new revisionist authoritarian axis is China-Russia-Iran. Russia is waging a campaign in Ukraine. Iran is waging a campaign in Israel. China is preparing a campaign in Taiwan. Failing to prepare is preparing to fail.”
Chamath Palihapitiya, CEO of VC firm Social Capital, turned his attention to oil, writing on Sunday: “How does oil not spike again now on the back of two hot wars (Israel-Hamas and Russia-Ukraine) and a 1.5M barrel production cut by OPEC with an SPR [Strategic Petroleum Reserves] that is at the same level it was in the mid 1980s?”
Energy traders quickly turned their attention to Iran’s oil exports, which have helped to moderate fuel prices amid supply squeezes by Russia and Saudi Arabia.
“I think this development will mean stronger enforcement of Iranian sanctions, so less Iranian oil going forward,” hedge fund trader Pierre Andurand told Bloomberg. “And then who knows what the domino effect will be in the region?”
Beyond the Middle East, higher fuel costs could hamper central banks in their fight against inflation, believes Alfonso Benito, chief investment officer at Dunas Capital.
“It is evident that any extension of this to oil-producing countries, Saudi Arabia in the lead, could make the price of crude oil more expensive with negative inflationary effects for the West and would mean higher rates for longer and falling stock markets if the above caused a recession,” he told Bloomberg.
A recession, of course, is what many in the business community have feared all year, but as Friday’s hot jobs report showed, the U.S. economy is still humming along. That, however, could push the Federal Reserve to hold interest rates higher for longer.
“It puts back on the table a hike for November,” Mohamed El-Erian, chief economic advisor for Allianz, told Bloomberg TV. “Markets are having to internalize not just high for long, but higher for longer…Over the long term this may end up being bad news for the economy as well.”
Now business leaders will have to factor in greater geopolitical uncertainty, as well.
