As tension continues in the Middle East, policy uncertainty, supply chain problems, and rising prices have shifted global economies. And as AI emerges as an important technology, consumers and job markets are changing.
On May 19, 2026, the UW Now Live hosted experts Patrick McDaniel and Kim Ruhl to discuss new policy and technology shifts shaping the U.S. economy. Mike Knetter, an economist and former CEO of the Wisconsin Foundation and Alumni Association, moderated the discussion.
Ruhl started the evening’s conversation by describing some of the forces affecting the global economy, including the closure of the Strait of Hormuz and geoeconomic changes to trade, defense, and supply chains. With oil prices and inflation on the rise, Ruhl said counties across the world are feeling the inflationary pressure caused by ongoing tension in the Middle East.
About 20 percent of the world’s oil is transported through the strait, and the route is a common channel for other high-demand goods, such as petroleum products and gasses. As access to these goods is restricted, Ruhl said prices will continue to increase. He also pointed out that while interest rates and inflation will likely continue to rise due to the closure, the longer the conflict continues, the more harmful the effects will be, and long-term conflict in the Middle East would lead to global depletion of petroleum product inventories, which would result in high prices and shortages.
“This is really a question of how quickly the engagement can be wrapped up. And then, even once it’s wrapped up, you’d anticipate it being months probably before markets renormalize to refill inventories and renormalize prices,” Ruhl said. “It will still take a little bit of time for things to bounce back.”
When it comes to the geopolitical pressures, he said there are three major elements affecting the economy today: U.S. tariff policies and the uncertainty surrounding many of the country’s policies, disruptions to supply chains, and increased spending on defense.
McDaniel then described the other major component of economic change, which is AI and the uncertainty surrounding the emerging technology.
AI, he said, is a fundamentally disruptive technology, which has the power to reshape career fields. As job markets evolve, new jobs will be created and new possibilities will emerge, and as advancements in AI continue, the technology is also creating new markets within already existing fields and areas of enterprise.
He pointed out that AI is not a single technology. Rather, it is a body of technologies that is the culmination of 50 years of research and a collaboration between public and private models, nonprofits, and academics. Although public domain models are not as cutting-edge as their private model counterparts created by companies such as Open AI, Anthropic, and Google, he says publicly available AI is not far behind private models and the supply chain for AI models is open in the public domain.
“The models that are free to the public are going to become more powerful, and the economic differentiators of these companies are going to diminish,” he said.
Instead, McDaniel said companies that have the potential to be major players in the age of AI are ones that provide infrastructure such as data centers, which are utilities for AI.
“The really profitable companies are the ones who are going to provide the hardware to implement AI,” McDaniel said.
McDaniel also rejects the idea that consumers are fearful of AI. Instead, he explained that trust is key, and many people are leery of AI because they see that tech companies often prioritize monetization of the consumer over consumer experience and privacy. He said that as AI becomes a common tool and begins to shape job markets and global competition, reservations around accepting these new technologies are also important.
The guests then answered viewer questions and discussed tariff policies, the risk of an AI bubble, the role of universities in developing AI, and more.
