The International Monetary Fund has warned that ongoing conflict in the Middle East could lead to higher global prices and slower economic growth. The IMF notes that disruptions to oil, gas, and fertilizer exports from the Gulf could increase energy and food costs, affecting living standards and potentially forcing central banks to raise interest rates. The IMF highlights that the duration and spread of the conflict will determine the extent of the economic impact.

The UK economy showed minimal growth in Q4 of last year, with GDP rising by just 0.1%, according to data from the UK Office for National Statistics. The data highlight the challenge for the government as the war in Iran is expected to dampen demand and increase inflation. The Organisation for Economic Co-operation and Development has downgraded its growth forecast for this year to 0.7%, citing the impact of the war.

US Federal Reserve Chair Jerome Powell said the central bank can look past the Iran war's energy shock for now but may act if inflation expectations begin to rise. He emphasized that while supply shocks are typically temporary, persistent price pressures could force the Fed to respond despite risks to economic growth.

Wall Street faces its worst quarter in almost four years as a historic surge in energy prices, driven by the war in the Middle East, raises fears of a global recession. The Nasdaq Composite and the Dow Jones Industrial Average have both fallen into correction territory, with the S&P 500 erasing gains from the past seven months. The conflict has disrupted oil supplies, causing a 55% increase in oil prices and diminishing expectations for US Federal Reserve rate cuts.

Foreign central banks have reduced their holdings of US Treasurys at the New York Federal Reserve to the lowest level since 2012, selling $82 billion since the Iran war began to support their economies and currencies as energy prices surge. Turkey's central bank has sold $22 billion in foreign government securities since the conflict began, and central banks in India and Thailand have also sold foreign exchange reserves.

The Korea Composite Stock Price Index has entered bear market territory, closing 4.3% lower Tuesday and extending a decline from February's record high to nearly 20%. Tensions in the Middle East have driven oil prices higher, raising inflation concerns, and investors are worried about the effect of Google's TurboQuant technology on demand for memory chips. Before the Iran war started the Kospi was the world's best performing market, but stocks have been among the hardest hit in March.

The Reserve Bank of India has postponed the implementation of stricter lending regulations for proprietary traders and liquidity providers, shifting the start date from April 1 to July 1, 2026. This delay comes as a direct response to heightened market turbulence linked to the ongoing Iran conflict, providing temporary relief to market participants concerned about increased volatility.

The US Commodity Futures Trading Commission continues to assert its primary enforcement authority over prediction markets but is increasingly emphasizing that exchanges and registrants themselves must serve as the first line of defense against market misconduct. The CFTC has signaled its expectations by publicly highlighting internal enforcement actions taken by Kalshi. This ""absolutely indicates that the CFTC is emphasizing the role of exchanges as the first line of defense in policing prediction and event contract markets," said former CFTC senior trial attorney Braden Perry.

Senior US Democratic lawmakers, including Rep. Angie Craig and Sen. Elizabeth Warren, have urged the US Commodity Futures Trading Commission and the Office of Government Ethics to issue guidelines to federal employees on insider trading on prediction markets. The push comes after incidents, such as a $400,000 bet on the capture of former Venezuelan President Nicolas Maduro, have raised concerns about government officials using nonpublic information for personal gain.

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