Navigating the timeline for the resolution of the conflict in Iran presents significant challenges. In contrast, assessing the related economic costs is far more straightforward. As the war drags on, the economic outlook becomes increasingly uncertain, with escalating risks of financial damage.
Projections for economic performance in the first quarter indicate a slight recovery from the stagnation experienced in the fourth quarter. However, the persistent threat of an energy crisis looms as the conflict in Iran continues unabated.
● The Alibi of Capital: How We Broke the Earth to Steal the Future on the Promise of a Better Tomorrow
Timothy Mitchell
Review via Publishers Weekly
In this transformative critique, political theorist Mitchell (author of Carbon Democracy) challenges the underlying logic of the current economic landscape. He reflects on how this era is characterized by immense wealth seemingly generated from obscure origins. Mitchell observes that even those critiquing today’s system struggle to comprehend the massive and concentrated wealth created by speculative markets. To fully grasp this unique form of acquiring unearned wealth, which is a hallmark of our contemporary existence, he asserts the necessity of understanding capital itself. According to him, capital primarily represents “a practical means of consuming the future.”
In February, the yield on the 10-year Treasury was nearing what is considered its “fair value,” based on the average from three different models. Prior to the outbreak of hostilities in Iran on February 28, the declining market premium observed in recent months was expected to persist, potentially even flipping to a discount shortly. However, the ongoing military engagements have disrupted these predictions, causing significant turbulence throughout the global economy.
The ongoing conflict in Iran has disrupted expectations for financial markets and the global economic landscape. However, commodities are seeing an upswing in prices, benefiting significantly from the unrest as energy and other raw materials become more expensive.
Prior to the commencement of the conflict on February 28, persistent inflation concerns had made the Federal Reserve wary of further extending the interest rate cuts seen in the last year. While some indicators of price pressure had stabilized at lower levels compared to recent trends, Fed officials remained cautious, hesitant to claim victory over the peak inflation rate of 9.0% year-over-year in June 2022.
The conflict in Iran is increasingly impacting global financial markets and economic activities, contributing to a shift in major U.S. equity indices into negative territory for the year. However, a closer examination reveals that many equity risk factors continue to yield positive returns in 2026, based on a range of ETFs as of the close on March 9.
Recently, Iran appointed Mojtaba Khamenei as the new supreme leader, succeeding his late father Ali Khamenei. This decision emphasizes that hardline factions maintain control within the country and will sustain their defiance against President Trump’s call for “unconditional surrender.” With both sides remaining resolute, a swift conclusion to the conflict, now entering its tenth day, appears unlikely.
● The Coming Storm: Power, Conflict, and Warnings from History
Odd Arne Westad
Interview with the author via Keen on America podcast
“If we let things continue in the direction that they are taking now, I think it is more likely than not that we will end up in some kind of Great Power war within the foreseeable future.” — Arne Westad
In a chilling discussion recorded before the invasion of Iran, historian Arne Westad draws attention to the structural resemblances between our current multipolar landscape and the prelude to the First World War, identifying the Middle East as a potential flashpoint for a larger conflict.
While the immediate repercussions of the conflict in Iran have not severely impacted the U.S. economy, the longer the war persists, the more pronounced these effects are likely to become.
