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One expert called the new IMF forecast "extremely concerning for the global economy," noting that "the most dire impacts of our economic situation will be felt by the poor and the vulnerable."
The International Monetary Fund warned Tuesday that the US-Israeli war on Iran could slow global economic growth, stoke inflation, and increase the possibility of a worldwide recession and energy crisis.
The illegal war of choice on Iran being waged by US President Donald Trump and the government of fugitive Israeli Prime Minister Benjamin Netanyahu has already had wide-ranging negative impacts on the global economy, from soaring fuel prices caused by the closure of the Strait of Hormuz to supply chain disruptions and financial market volatility.
However, a major global economic crisis has thus far been averted. That could soon change.
"Despite major trade disruptions and policy uncertainty, last year ended on an upbeat note," International Monetary Fund director of research Pierre-Olivier Gourinchas wrote in an analysis of the IMF's latest World Economic Outlook report. "The private sector adapted to a changing business environment, while powerful offsets came from lower US tariffs than originally announced, some fiscal support, and favorable financial conditions coupled with strong productivity gains and a tech boom."
"Despite some downside risks, the momentum was expected to carry over into 2026, lifting the pre-conflict global growth forecast to 3.4%," Gourinchas continued. "War in the Middle East has halted this momentum. The closing of the Strait of Hormuz and serious damage to critical facilities in a region central to global hydrocarbon supply raise the prospect of a major energy crisis should hostilities continue."
The IMF said that even if the war ends quickly, lasting damage to the world's economy will still happen.
According to the IMF report:
Under the assumption of a limited conflict, global growth is projected at 3.1% in 2026 and 3.2% in 2027, below recent outcomes and well under pre-pandemic averages. Global inflation is expected to tick up in 2026 and resume its decline in 2027. Pressures are concentrated in emerging market and developing economies, especially commodity importers with preexisting vulnerabilities. Risks are decisively on the downside. A prolonged conflict, deeper geopolitical fragmentation, disappointment over [artificial intelligence]-driven productivity, or renewed trade tensions could weaken growth and unsettle markets. High public debt and eroded policy buffers add vulnerability. Policies should foster adaptability, enhance credibility, and reinforce international cooperation.
The IMF said that "the shock’s ultimate magnitude will depend on the conflict’s duration and scale—and how quickly energy production and shipment normalize once hostilities end," and that effects will vary by location.
"Countries will feel the impact differently," Gourinchas wrote. "As in past commodity-price surges, importers are highly exposed. Low-income and developing economies—especially those with vulnerabilities and limited buffers—are likely to be hit hardest. Gulf energy exporters will face economic fallout from damaged infrastructure, production disruptions, export constraints, and weaker tourism and business activity. Remittances will fall in countries that supply migrant workers to the region."
Eric LeCompte, executive director of the religious development group Jubilee USA Network and a United Nations finance expert, called the new IMF forecast "extremely concerning for the global economy," lamenting that "the most dire impacts of our economic situation will be felt by the poor and the vulnerable."
The new report comes as the IMF's annual Spring Meetings are underway in Washington, DC.
“World leaders coming to Washington are receiving a very dark picture of the global economy,” said LeCompte. “The war is causing greater poverty and increases in our fuel and food costs."
Other groups have also warned of the adverse economic effects of the US-Israeli war on Iran.
Ben May, Bridget Payne, and Paul Moroz of Oxford Economics recently published a report warning that a longer war in Iran "could tip the global economy into recession."
In such a situation, "the Gulf states suffer most acutely—GDP down over 8% in 2026—before rebounding sharply as production recovers," they wrote. "Advanced Asian economies, which are especially reliant on Gulf oil, take a heavy blow from energy import cost surges and supply chain disruption."
"Europe faces a painful squeeze on gas and electricity," the trio added. "The US fares somewhat better given its domestic energy production, but an equity market decline of nearly 20% weighs heavily on consumer spending."
Some US-based organizations have focused on the war's domestic economic impacts.
Dean Baker, a senior fellow at the Center for Economic Policy Research, published an analysis earlier this month asserting that "making enemies makes us poorer."
"Secretary of Defense (or War) Pete Hegseth seems to be having a really great time killing people in Iran, but his live action video games come at a big cost—not just in lives, but in budget dollars," Baker wrote. "To be clear, the main reason to oppose this pointless war is its impact on the people of Iran and elsewhere in the region. But it also has a huge economic cost that is seriously underappreciated."
"In addition to reducing our security and jeopardizing the well-being of people around the world, Donald Trump’s belligerence will cost us a huge amount of money," he said. Focusing on US military spending, Baker noted that "Trump wants the country to spend 5% of GDP, or $1.5 trillion a year, on the military. This comes to $12,000 per household."
Trump and his Republican Party are seeking to offset some of their record military spending with devastating cuts to social programs upon which tens of millions of Americans rely. Already reeling from the biggest cuts to Medicaid and Supplemental Nutrition Assistance Program spending in those programs' histories, Trump’s budget request for fiscal year 2027 contains $73 billion in total reductions in nondefense spending.
"It is striking to see that Congress might be willing to quickly cough up this money," said Baker, referring to military funding, "when it has refused far smaller sums that could have made a huge difference in the lives of tens of millions of people."
As the Inter-American Commission on Human Rights was advised not to investigate the bombings, Pentagon officials expressed support for strikes on land, ostensibly against drug traffickers.
The former president of a top international human rights watchdog views the United States' monthslong campaign of bombing boats in the Caribbean Sea and eastern Pacific Ocean as a clear-cut case of "murder," he told The Intercept Monday, but he warned that pressure from the Trump administration may stop the body from investigating the Pentagon's actions.
Juan Méndez, a former president of the Inter-American Commission on Human Rights, noted that a month after the IACHR held a hearing on the boat bombing campaign, officials "may well feel that this is a very delicate situation, and if they take the initiative, they’re going to incur the wrath of the United States."
The hearing last month was the first of its kind and included testimonies from the ACLU, the Center for Constitutional Rights, International Crisis Group, and Ben Saul, the United Nations special rapporteur on counterterrorism and human rights. The groups presented evidence that the US has been violating both domestic and international law by bombing vessels that it has claimed—without making any evidence publicly available—are involved in drug trafficking. Nearly 170 people have been killed in dozens of strikes, and legal experts worldwide have asserted the US is violating international law and has committed extrajudicial killings—potentially making those involved in the strikes liable for murder.
The hearing was followed by a statement from Tommy Pigott, a State Department spokesperson, who said the IACHR had "strayed far outside its mandate” by looking into the boat attacks—as the family of one man killed in a bombing requested it to—and accused the ACLU of trying to manipulate the body.
"The United States calls on the commission to adhere to its statute and rules of procedure in the future and avoid inserting itself into matters that are in active domestic litigation and fall outside the human rights sphere," said Pigott. "Convening hearings under these circumstances risks undermining—not strengthening—the credibility of the inter-American human rights system."
Pigott also called on the commission to "redirect its focus toward the individual petitions languishing on its docket, sometimes for decades." He did not mention specific petitions or issues the IACHR should focus on.
Carl Anderson, a legal adviser at the State Department, also rebuked the commission for holding the proceedings.
"If the United States cuts the funding, they probably would have to shut down—at least for a while.”
A person with close ties to the IACHR told The Intercept that Pigott's demand that the commission focus on other topics pointed to a pressure campaign aimed at stoking fear that the IACHR could lose its funding.
President Donald Trump's zeroed out US contributions to the commission during his first term in 2018, and withdrew some funding the following year due to its support for abortion rights. The administration terminated funding last year for at least 22 programs under the IACHR's parent body, the Organization of American States, of which the US is the largest international funder.
“They are stretched for funding," Méndez told The Intercept. "And if the United States cuts the funding, they probably would have to shut down—at least for a while.”
Stuardo Ralón, the IACHR's current president, denied that there is "pressure from the United States on the Inter-American Commission on Human Rights," but suggested it may not conduct a comprehensive investigation into the Trump administration's boat bombings—saying the body "does not conduct investigations."
The Intercept noted that the IACHR has conducted numerous investigations that it has publicly acknowledged and described as such, including into US immigration detention centers and the kidnapping and apparent killing of 43 students in Mexico in 2014.
Ralón told the outlet that it has not yet taken any steps to launch an investigation into the strikes following the hearing, and said it "will continue to monitor the situation in accordance with its mandate."
Jamil Dakwar, director of the ACLU’s human rights program, emphasized that "the commission is within its competency and its bounds to fully investigate the egregious violations of international law happening in its own backyard.”
“We have asked the commission to fulfill its responsibilities as the premier regional human rights body to conduct a fact-finding investigation of these heinous killings," Dakwar told The Intercept, "and to ensure that no country can act in this fashion because that will have severe implications on human rights in the region and beyond."
As the State Department has pushed the IACHR away from probing the legality of the boat bombings, administration officials like Joseph Humire, acting assistant secretary of war for homeland defense and Americas security affairs, have warned that the attacks at sea are "just the beginning" of what officials claim is an effort to defeat drug cartels—against which Congress has not authorized any military action.
US Southern Command announced a joint ground operation with Ecuador last month to defeat "narco-terrorists."
Humire said the Pentagon supports "joint land strikes," while Gen. Francis Donovan, the head of US Southern Command who has been directing the boat attacks, told the Senate Armed Service Committee that the Pentagon is moving toward "a counter-cartel campaign process that puts total systemic friction across this network."
"I believe," he said, "these kinetic [boat] strikes are just one small part of that.”
"The interest costs alone will add billions of dollars to the total cost of this war," said Linda Bilmes. "And unlike the upfront costs, these are costs we are explicitly passing on to the next generation."
A Harvard expert who specializes in looking beyond official government estimates to calculate the true financial cost of US wars has said she is "certain" the price tag of President Donald Trump's assault on Iran will eventually reach at least $1 trillion, once benefits for troops, replenishment of munition stockpiles, borrowing costs, and other factors are fully taken into account.
“We are borrowing to finance this war at higher rates, on top of a much larger debt base,” Linda Bilmes, the Daniel Patrick Moynihan senior lecturer in public policy at the Harvard Kennedy School, said in a recent interview. "The result is that the interest costs alone will add billions of dollars to the total cost of this war. And unlike the upfront costs, these are costs we are explicitly passing on to the next generation."
Bilmes, who co-authored The Three Trillion Dollar War: The True Cost of the Iraq Conflict with Nobel laureate economist Joseph Stiglitz, estimates that the first several days of the US-Israeli assault on Iran cost American taxpayers at least $16 billion—significantly more than the Pentagon's official figure, $11.3 billion.
"The short-term costs are even higher than they appear," Bilmes emphasized. "The Pentagon reports costs based on the historical value of inventory, instead of the actual cost it takes to replace what we are using. And those replacement costs are far higher."
Bilmes also pointed to the substantial costs of "large, multi-year contracts" the Trump administration has inked with arms manufacturers such as Lockheed Martin.
Over the long-term, said Bilmes, the cost of veterans' care will be massive. "We now have roughly 55,000 US troops deployed in this conflict who have been exposed to toxins, contaminants, and environmental hazards, such as burning fuel and chemical residues that we know can cause long-term harm," she noted. "If even one-third of the 55,000 troops deployed today claim benefits, then we are committing ourselves to tens or hundreds of billions of dollars in disability and medical care costs for this cohort alone."
"I am certain we will spend $1 trillion for the Iran war," Bilmes said. "Perhaps we have already racked up that amount."
The Trump administration is expected to request that Congress approve between $80 billion and $100 billion in funding for the Iran war, according to The Washington Post. Earlier this month, the Trump White House released a budget proposal that called for $1.5 trillion in military spending next fiscal year.
Bilmes noted that if Trump's request is fully enacted, US military spending would rise "to levels about 20% higher than the peak reached during World War Two."
"This raises the baseline," Bilmes said. "Even if Congress does not agree to approve the full increase, it is highly likely that at least $100 billion per year will be added to the base defense budget that would not have been approved in the absence of this war."
"And once that increase is built into the base," she added, "it raises the baseline and compounds—so an additional $100 billion per year is $1 trillion over the next decade."
If predictions for a super El Niño are correct, our brief vacation from thinking about climate change as a crucial fact of life on this planet will soon be over.
Every once in a while I have to snap out of the hypnotic grip of the bizarre news cycle and remind myself—and you—that there’s something even more important underway than the obvious mental and moral decline of the president: the relentless rise in the temperature of the planet. So here’s my latest occasional update from the physical world, and I fear the news is not good.
Let’s begin with the immediate past, and stay close to home, because the US has been the center of some of the most extreme meteorological action on planet Earth recently. Consider our winter: Though it was chilly in the Northeast, if you averaged the temperature across the lower 48 it was the second-hottest winter on record. That's because nine states had their hottest winter ever and five their second hottest. As Andrea Thompson pointed out in Scientific American: “Nowhere in the US had a record cold winter this year. Nowhere even came close.”
That winter, by the way, was December, January, and February—what we call “meteorological winter” because it coincides with the coldest quarter of the year. It was outrageously hot and very dry, with severely shrunken snowpacks across the mountains of the West, which made Westerners nervous about the chances for wildfire as the summer wore on.
And then came March.
The havoc unleashed by a super El Niño will coincide with the havoc unleashed by President Donald Trump in the Gulf to produce a perfect storm of support for rapid action on getting off fossil fuels.
March was the single craziest month in US weather history. Here’s how Seth Borenstein put it in the lede of his account for The Associated Press:
March’s persistent unseasonable heat was so intense that the continental United States registered its most abnormally hot month in 132 years of records, according to federal weather data.
The federal government is still collecting weather data (though far less than it used to), and so we know the following remarkable fact according to the National Oceanic and Atmospheric Administration (NOAA):
The average maximum temperature for March was especially high at 11.4°F (6.3°C) above the 20th century average and was almost a degree warmer than the average daytime high for April.
As Bob Henson points out in the Yale-based blog Eye of the Storm:
In 35 of the 48 contiguous states, the statewide average reading was among the top-10 warmest for any March. Not a single contiguous state was cooler than average.
Henson also points out that a lack of rainfall meant it’s so far been the driest year in American history:
The nationally averaged precipitation total for 2026 to date is an ominous one: a mere 4.79 inches. That’s the lowest value on record for any January-to-March interval, including such notoriously dry periods as the Dust Bowl of the 1930s. The previous record low was 5.27 inches, set in Jan.-Mar. 1910.
As Henson’s colleague Jeff Masters succinctly told the AP:
Climate change is kicking our butts
And I fear it’s barely begun the beating. Because over the last two weeks, even as the world has fixed its gaze on the Middle East, meteorologists have been staring in some awe and terror at what appears to be a rapidly building El Niño. I’ve been telling you this is on the way for some months, but it’s coming into ever-clearer focus. NOAA again, in its April forecast, put the odds of a El Niño beginning this summer at better than 60%. More to the point, the wide array of computer models around the planet are beginning to predict a so-called “super El Niño,” when temperatures in the critical region of the Pacific shoot up far far far higher than in the past. Henson and Masters again:
For October, roughly half of the ECMWF ensemble is calling for sea surface temperatures in the main El Niño region (Niño3.4) to exceed 2.5°C above the seasonal average. Such values would correspond to what’s loosely referred to as a “super El Niño.” Though there’s no official definition for a “super” event, the term is often attached to El Niño when its peak anomalies reach at least +2.0°C. Since 1950, the only El Niño events that have hit this threshold for at least one three-month interval were in 1972-73, 1982-83, 1997-98, 2015-16, and 2023-24. Only one of those events, in 2015-16, pushed all the way past +2.5°C.
Here’s a useful graph of the various estimates from the computer modelling, courtesy of Zeke Hausfather:

Basically it reads: a world we haven’t seen before. Because remember, El Niño comes on top of the steadily rising temperature of the Earth. If these forecasts bear out, then possibly 2026 and certainly 2027 will be the hottest years ever recorded on this Earth. As the atmospheric scientist Paul Roundy put it, there’s a “real potential for the strongest El Niño event in 140 years.” We don’t know, of course, exactly how this will manifest, but as Gabrielle Cannon wrote Monday in The Guardian
A super El Niño that occurred in 2015 brought severe drought in Ethiopia, water supply shortages in Puerto Rico, and smashed records after unleashing a vicious hurricane season in the central North Pacific, according to an analysis by US federal scientists.
The cycle tends to create drought and heat across Australia, around southern and central Africa, in India and in parts of South America, including in the Amazon rainforest. Heavy precipitation, meanwhile, could hit the southern tier of the US, parts of the Middle East, and south-central Asia.
I think it’s safe to say that we can expect more weather chaos than we’ve ever seen before (the good folks at Covering Climate Now put together a useful briefing for reporters last week). Here’s my prediction, since my job is to figure out how the physical and political worlds intersect:
The havoc unleashed by a super El Niño will coincide with the havoc unleashed by President Donald Trump in the Gulf to produce a perfect storm of support for rapid action on getting off fossil fuels. Our brief vacation from thinking about climate change as a crucial fact of life on this planet will be over; the conjoined fears of the next months will combine to put us in a very new place politically.
My main fear is that this useful moment is coming very late in the game.
And by that I mean that the last few weeks have also produced a new round of research on the damage that human warming of the Earth is doing to its most basic systems. For simplicity’s sake let’s concentrate on one big system, the Atlantic Meridional Overturning Current or AMOC, that system of currents (like the Gulf Stream) in the Atlantic that are the planet’s biggest heat distribution system.
The collapse of the AMOC has been a recurring nightmare in the climate literature—I first wrote about it in The End of Nature in the 1980s. But the prevailing theory was that it would take a good long while, probably more than a century. In recent years that consensus has been weakening, and the fears of a much more rapid failure of these currents—which keep Europe far warmer than it would otherwise be—have grown rapidly. We’re about a decade out from an ominous paper in Nature that warned that an anomaly in the north Atlantic—a “cold blob” in an otherwise rapidly warming global ocean—could signal that melting ice pouring off Greenland was fatally weakening the currents, by changing the salinity and hence the density of seawater. Research since them has not been comforting, with at least one prominent paper warning the collapse could come as early as the 2030s. Last year Iceland declared an AMOC collapse as a “national security risk,” since the disappearance of the current could turn the temperate country into what one of its foremost experts called “one giant glacier.” It would certainly be a civilizational event for all of Europe.
Anyway, a new paper last week in Science seemed to indicate, with data gathered from four mooring buoys along the western edge of these currents, that there is:
a meridionally consistent decline in deep western overturning transport across these latitudes over the past two decades. This decline, observed at the western boundary, may serve as an effective indicator of AMOC weakening
Here’s how Alec Luhn explained the significance in New Scientist:
The study’s analysis of the latest RAPID-MOCHA data shows that the flow of the AMOC is declining by about 90,000 cubic metres of water per second each year, a faster rate than what has previously been observed. That means between 2004 and 2023, the AMOC weakened by about 10%.
But the uncertainty range of this change in flow is almost as large as the change itself. For this reason, Xin’s study also analyses pressure changes at three mooring arrays that have been installed since 2004 in the western Atlantic off the West Indies, the US East Coast and Nova Scotia, Canada. There, it finds an even greater weakening of the AMOC, with much less uncertainty.
“It is the strongest direct observational evidence so far” that the AMOC is weakening, as models have long shown, says Stefan Rahmstorf at the University of Potsdam, Germany, who wasn’t involved in the research.
Meanwhile, another new and equally ominous paper in Nature late last month showed that a collapsing Atlantic current system would release prodigious amounts of carbon into the atmosphere, thus dramatically increasing overall global warming even as Europe froze. As William Hunter helpfully explained in (of all places) the Daily Mail:
The scientists’ computer simulations revealed that halting this key current will release vast stores of carbon currently trapped deep beneath the ocean.
This would increase the concentration of CO2 in the atmosphere by 47 to 83 parts per million, triggering up to 0.27°C (0.5°F) of additional warming worldwide.
"Our study shows how an AMOC collapse could flip the Southern Ocean from a carbon sink into a carbon source, releasing vast amounts of CO2 and fuelling further global warming," said Johan Rockström, director of the Potsdam Institute for Climate Impact Research, "The ocean has been our greatest ally, absorbing a quarter of human-made CO2 emissions."
The scariest piece of the puzzle in the new study may be the profound, and completely opposite, consequences for the two poles. As the authors put it:
regional temperature anomalies are pronounced: Arctic temperatures cool by ~ 7°C (60°N-90 °N), while Antarctic temperatures warm by ~ 6°C (60°S-90°S).
A world in which the Arctic quickly cooled 12°F just as the Antarctic warmed by 10°F would be a very very different world indeed, one capable of violent change on a scale I don’t really want to imagine. In any event, as Potsdam Institute director Johan Rockstrom explained:
The more CO2 in our atmosphere at the stage of shutdown, the higher the likelihood of additional warming. Put simply, rising emissions today increase the risk of a stronger climate response down the line.
And that’s the one part of the equation we can do something about. We have one tool to keep carbon dioxide out of the atmosphere: the substitution of clean energy for fossil fuel. Our weapons in this fight are solar panels, wind turbines, and batteries. We need to crash them into place before these systems crash down upon us. That’s the job.