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barrons.com

Source: barrons.com

A US-Iran war triggers supply shocks that spike inflation while tanking growth, potentially causing a supply-side recession.
Fed stimulus in response worsens the mess, pushing prices even higher and forcing aggressive rate hikes.
Extreme shocks mimic COVID dynamics, blending low output with raging inflation.

The video breaks down how a US-Iran conflict hammers the economy through supply disruptions. It uses a classic aggregate demand-supply model to show why wars like this breed inflation and recessions. This matters because it explains the Fed's nightmare scenario of fighting fires on both growth and price fronts.