The Organisation for Economic Cooperation and Development has sharply reduced its global growth projections, citing the deepening economic fallout from the U.S.-Iran war.
The OECD's latest assessment highlights the risk of a prolonged global slowdown, with the conflict's impact on trade and energy markets compounding existing economic pressures.
Markets have already begun to reflect these concerns, with equity indices showing signs of volatility and bond yields fluctuating as investors reassess risk.
The S&P 500, while currently rebounding, faces headwinds from the ongoing geopolitical tensions and their ripple effects on consumer and business confidence.
The European Union is also expected to revise its economic outlook downward, citing a 'stagflationary shock' linked to the war.
This aligns with broader global trends, as the protracted conflict continues to disrupt supply chains and fuel inflationary pressures.