The closure of the Strait of Hormuz would cause oil prices to surge and trigger a sharp slowdown in economic growth, economists have warned.

A sustained surge in oil prices is likely to complicate the U.S. fight against inflation. A $10-a-barrel increase would boost year-over-year growth in the Consumer Price Index by 0.5 percentage points,

As Israel and Iran exchanged more attacks, stock markets mostly rose even as worries remained about possible oil supply interruptions.

Although the U.S. is a net oil exporter, higher oil prices could increase inflation and lower economic growth.

The Federal Reserve is widely expected to hold interest rates steady at its meeting this week, but investors will be watching for something else — whether central bank policy makers are still committed to two rate cuts this year.

A sustained rise in the price of crude oil, which jumped sharply after Israel attacked Iran, could hurt consumers and President Trump’s efforts to bring down energy costs.

The Federal Reserve is widely expected to hold interest rates steady next week, with investors focused on new central bank projections that will show how much weight policymakers are putting on recent soft data and how much risk they attach to unresolved trade and budget issues and an intensifying conflict in the Middle East.

Keep an eye out for signs of labor-market weakness, as well as the risk that rising oil prices could put more upward pressure on inflation.