In what is likely to be the latest exogenous shock to an already over-shocked economic system, Hurricane Ian is steadily moving towards Florida, promising lots of flooding, lots of damage—and lots of inflationary spikes to further skew Fed Chair Jay Powell’s misshapen “war” on inflation.
In addition to the development of an inner core, the upper-level outflow over the storm has expanded overnight. Ian will be traversing the warm waters (30 degrees C) of the northwestern Caribbean and remain within very low shear conditions today. These very conducive environmental factors along with the improved structure of the storm are likely to result in rapid intensification today, and Ian is forecast to be a major hurricane when it moves near or over western Cuba tonight. This is supported by the majority of the intensity guidance, and the SHIPS Rapid Intensification (RI) Index that gives a 90 percent chance of a 30 kt increase in wind speed over the next 24 hours, and about a 60 percent chance of a 40 kt increase in wind speed during that same period. Ian is not expected to spend much time over western Cuba, and additional strengthening is likely over the southeastern Gulf of Mexico on Tuesday. Around 60 hours, a sharp increase in southwesterly vertical wind shear and a drier mid-level environment to the northwest of Ian is likely to induce some weakening. Despite the reduction in intensity, Ian is likely to have an expanding wind field and will be slowing down by that time, which will have the potential to produce significant wind and storm surge impacts along the west coast of Florida.
The one piece of good news is that Ian looks likely to avoid the major Gulf oil production areas. Had a major hurricane barreled through that or taken aim at either Houston or New Orleans the disruption to the energy sector could very easily reversed the recent declines in energy prices.
At this point, however, particularly as regards the economic impacts of the storm, that appears to be the only good news. A major hurricane is headed for Florida. This is not a good thing.
The biggest danger right now is that Ian takes a path just to the west of Tampa Bay, which is very susceptible to storm surge.