Iran War's Stagflation Trap Reshapes Central Bank Playbook

The February 2026 Iran war has plunged central banks into a stagflationary vice: soaring energy inflation collides with faltering growth, forcing a policy recalibration. IMF forecasts reveal advanced economies at 2.8% inflation, emerging markets at 5.5%, while consumer expectations hit 4.8%. This inflection point exposes the fragility of pre-war monetary assumptions amid shadow finance risks and geopolitical wild cards.