This is an adapted excerpt from the April 19 episode of “Velshi.”

At the start of the war with Iran, the Trump administration came up with a catchy phrase to sell it to the American public: “short-term pain for long-term gain.” But seven weeks later, the reality of the situation may be the opposite: short-term gains masking signs of long-term pain.

On Friday at 8:45 a.m. ET, Iran’s foreign minister announced on X that the Strait of Hormuz would reopen. President Donald Trump spread the news on social media, announcing that the Strait of Hormuz (which he mistakenly called the “Strait of Iran”) was “fully open and ready for full passage.”

In the time between those two announcements, the price of Brent crude oil quickly dropped from about $95 per barrel to about $88 per barrel. 

All of that happened less than one hour before the stock market opened for the day, and once the opening bell rang on Wall Street, markets rallied. The S&P 500 even posted a record by the end of the day on Friday. It jumped 1.2% to close above 7,100 for the first time in its history.

But on Saturday — less than 24 hours after Trump announced that the Strait of Hormuz had reopened — Iran closed the waterway again, accusing the U.S. of violating the deal by continuing its blockade of Iranian ports.

The timing here is important. Trump brings up the stock market a lot. He often uses it as a quick, superficial data point to signal how he wants you to feel about the economy. But it’s a distraction. 

The stock market is an imprecise and imperfect way to gauge the health of the economy, especially when it’s reacting to the whims and lies of an erratic president. In reality, experts have been sounding the alarm about what Trump’s war with Iran means for the global economy in the longer term.

In January, the International Monetary Fund projected that the global economy would grow by 3.3% in 2026. At the time, it even remarked, “The global economy remains resilient amid diverging forces.”

That was before the war. Then last week, the IMF revised its projection downward to 3.1%, largely due to the spike in energy prices driven by the conflict in the Middle East.

But the IMF’s chief economist offered an additional warning in that report: Its updated forecast may already be outdated. The current average price of oil is much higher than what the IMF used for its baseline forecast. Plus, the war with Iran remains volatile, and a durable peace agreement doesn’t seem likely at this point. So the longer the war goes on, the more uncertain the global economic outlook becomes.

Instead, the IMF warned that we’re moving closer to what it calls “the adverse scenario” — a dire situation in which the world is teetering on the brink of a recession.

Allison Detzel contributed.

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