Wall Street Assessing War Risks to US Economy, Homeowners Stay Out | Bloomberg Markets 3/5/2026

Wall Street analysts are evaluating geopolitical risks to the U.S. economy amid rising global tensions, with Charles Schwab’s Liz Ann Sonders warning of potential market volatility tied to escalating conflicts. Housing market trends show homeowners delaying sales due to high mortgage rates, according to Morgan Stanley’s James Egan, who notes reduced inventory could sustain price pressures through 2026. Investors are shifting portfolios toward defensive assets like Treasuries and gold as uncertainty grows, per Sonders, who cites historical patterns of flight-to-safety during geopolitical crises. Egan highlights mortgage-backed securities facing stress from prolonged high rates, signaling potential liquidity challenges for lenders if rates remain elevated this year. Both experts agree Federal Reserve policy will be pivotal, with Sonders emphasizing rate cuts could hinge on inflation data, while Egan warns housing affordability may worsen without intervention.