The potential impacts of the Israel-Hamas escalation on the US inflation, interest rate and stock prices:

1. Oil supply fears fan inflation risks. With M2 money supply already constrained by central banks, this extra inflation impulse would be more persistent.

2. To counter rising inflation, the Fed may have to accelerate interest rate hikes and quantitative tightening. This would reduce liquidity further when it is already flat.

3. Stocks would likely price in higher recession odds over a 6-12 month horizon. The strong dollar adversely impacts US earnings from overseas. This could weigh on stocks as well.