Axios

To understand what the global economy will do this year, you have to understand what happens next in the Iran war.

• The outlook for the war and its aftermath, and what that means for the free passage of energy through the Strait of Hormuz, is the global economic outlook.
• That's the uncomfortable reality hanging over the International Monetary Fund and World Bank Group spring meetings this week.

Why it matters: The economic pain is uneven: Poorer countries that import their oil carry the heaviest weight.

• The U.S. — the country that started the conflict — is poised to suffer the least economic damage, by almost every measure.
• Still, a prolonged surge in prices for gasoline, diesel, jet fuel, fertilizer and more would exact a toll in the U.S.

The intrigue: There is little else on the minds of finance ministers, central bankers and other policymakers meeting in D.C. this week but the shock that is rattling their respective economies.

Consider the economic forecast that set the tone for the meetings. The IMF slashed its global growth forecast as it predicted a surge in inflation this year.

What they're saying: "The impact of the war will be uneven," IMF chief economist Pierre-Olivier Gourinchas told reporters on Tuesday.

• Alongside a baseline scenario, the IMF released two other forecasts in the event of a more prolonged conflict: an adverse scenario of a sharper economic slowdown and a more severe scenario that has the global economy flirting with an outright recession.
• But the growth hit for poorer nations would be twice as large as that for richer nations, the IMF said.
• "Every day that passes and every day that we have more disruption in energy, we are drifting closer toward the adverse scenario," Gourinchas said.

Zoom out: "The U.S. isn't vulnerable. It's the Asian countries who are," Treasury Secretary Scott Bessent told reporters when asked about the Strait of Hormuz blockade imposed earlier this week.

• "I can say that the president signaled that it would be a four- to six-week process ... and I think we're close to that," top White House economist Kevin Hassett told Axios.

The bottom line: Even if the U.S. escapes the worst, it still faces higher commodity prices — especially at the pump.

• Will inflation pressures at home eventually force President Trump to seek a quicker end to the war?

Former World Bank president David Malpass told Axios: "It's a clear supply shock — and so that's not just oil and natural gas, but in other products that are coming through the Strait of Hormuz. That takes time for the world to adjust to."

• "But my observation is markets are really good at adjusting to a supply shock."

The U.S. Air Force is developing and deploying refueling adapters for the A-10, giving the beloved-but-aging attack aircraft additional means of staying aloft.

Why it matters: The A-10, often referred to as the Warthog, has played a key role in Operation Epic Fury.

• The warplanes have strafed boats in the Strait of Hormuz and aided the rescue of an F-15E Strike Eagle pilot and weapon-system office deep inside Iran.

The S&P 500 just took a round-trip — the stock benchmark for investors has recovered, and then some, from a war-driven selloff.

Why it matters: It's a split-screen moment: investor enthusiasm happening alongside the biggest energy shock in history, a rise in inflation and warnings about slower economic growth.

Secretary of State Marco Rubio hosted the Israeli and Lebanese ambassadors to Washington for a two-hour meeting on Tuesday, during which they agreed to hold further direct talks on a peace agreement.

The big picture: Israel is conducting a wide-ranging ground invasion in southern Lebanon amid its war with Hezbollah. President Trump pushed Israeli Prime Minister Benjamin Netanyahu to de-escalate the fighting last week, paving the way for Tuesday's meeting.

The wealth gap between white and Latino households poses deep problems for the U.S. economy in the coming decades, according to a new report out Wednesday.

Why it matters: Latinos are the fastest-growing demographic in the U.S., but have $.22 in household wealth for every $1 held by white households. This could limit consumer spending, business formation and long-term growth if unaddressed.

The Trump administration eased sanctions on Venezuela's state-run financial system Tuesday to try to boost the country's economy amid protests by public workers demanding higher pay.

Why it matters: Venezuela's government-run bank and other large financial institutions can now begin legally using U.S. currency, directly receive billions of dollars in oil sales and reenter the U.S.-controlled global financial system to help its damaged economy.

A LEGO man rapping about President Trump's TACO trades and an image of the commander-in-chief as a Jesus-like figure healing the sick are both symptoms of an AI-fueled propaganda boom driven by the Iran war.

Why it matters: AI "slopaganda," as such content is called, is the new reality moving forward when it comes to warfare, propaganda and information warfare experts tell Axios.

The International Monetary Fund cut its 2026 global economic growth forecast Tuesday, warning of slower growth and higher inflation thanks to the Iran war.

Why it matters: The war and energy shock in tow has halted economic momentum — and even a rather short conflict will do real damage, it finds.

The Iran war brought global economic momentum to a halt, the International Monetary Fund said Tuesday, providing new projections for slower growth and higher inflation.

Why it matters: It is the latest major economic institution to warn about stagflation-like global economic fallout from the war. The conflict upended what was shaping up to be a solid year for the global economy.

Global oil consumption is slated to dip this year as high prices and scarce supplies bring "demand destruction," the International Energy Agency projected Tuesday.

Why it matters: It's a stunning reflection of the historic throttling of supplies from the Iran war.