US Treasury Secretary Advocates Economic Sacrifice for Nuclear Security

US Treasury Secretary Scott Bessent has argued that temporary economic challenges are justified to counter the threat of Iranian nuclear attacks on Western cities. Amid concerns raised by the International Monetary Fund (IMF) about a potential global recession from the US-Israel conflict with Iran, Bessent emphasized the importance of long-term security over short-term economic forecasts.

“I wonder what the effect on global GDP would be if a nuclear weapon struck London,” Bessent remarked. “I am prioritizing long-term security over immediate economic impacts, as we now know Iran possesses mid-range ballistic missiles capable of reaching key European capitals.”

Iran maintains its nuclear program is solely for peaceful purposes. The UK government stated there was “no assessment” of an imminent missile attack targeting Europe, though it highlighted its readiness to defend the nation from any threats. Bessent noted that US and Israeli military actions had mitigated the risk of Iranian strikes against Western countries.

The IMF’s recent report warned that a worst-case scenario—marked by sustained spikes in oil, gas, and food prices—could reduce global growth to below 2% in 2026. This would bring the world close to a recession, a phenomenon that has occurred only four times since 1980, most recently during the pandemic.

Energy Price Volatility and Regional Economic Impact

Since the conflict began over six weeks ago, energy prices have surged following the closure of the Strait of Hormuz and stalled peace talks between the US and Iran. The IMF highlighted that prolonged hostilities could lead to inflation exceeding 6% by next year, prompting central banks to raise interest rates to curb rising costs.

“Even a brief conflict would disrupt oil supply as significantly as the 1970s embargo,” said IMF chief economist Pierre-Olivier Gourinchas. “However, reduced reliance on fossil fuels has lessened the impact on consumers compared to past crises.”

Despite current oil prices nearing $120, they have since declined to $95 per barrel. The IMF noted that if the conflict ends soon and energy production stabilizes by mid-2026, global growth could ease to 3.1% that year, slightly below earlier projections. Inflation forecasts for 2027 remain unchanged at 3.2%.

The UK is expected to face the steepest economic decline among advanced nations, with growth dropping to 0.8% this year from 1.3%. However, the country is projected to rebound with 1.3% expansion in 2027. Gulf oil exporters, meanwhile, may experience sharp growth slowdowns or contractions, while Iran’s economy is forecast to shrink by 6.1% this year before recovering to 3.2% in 2027, contingent on a swift resolution to the conflict.

On Sunday, US President Donald Trump announced a blockade of Iranian ports to…