Treasury Secretary Scott Bessent stated on April 14, 2026, that U.S. economic growth could exceed 3 percent or even reach 3.5 percent this year despite the ongoing U.S.-Israeli war with Iran. He made the comments in Washington during discussions on global finance and the conflict’s effects. Bessent pointed to the underlying strength of the American economy as the key factor that would allow it to absorb the shocks from higher oil prices and market volatility caused by the war.
The war began at the end of February 2026 with U.S. and Israeli strikes targeting Iranian facilities. Iran responded with attacks that disrupted energy infrastructure, including actions affecting the Strait of Hormuz. This led to immediate spikes in global oil prices. Brent crude and West Texas Intermediate saw sharp increases in the following weeks. The conflict has shaken markets worldwide and forced adjustments in supply chains for energy and related goods.
Bessent spoke clearly about the situation. He said the U.S. economy remained strong at its core. He added that growth could easily exceed 3 percent and hit 3.5 percent for 2026 even with the war’s impact. This projection came on the same day the International Monetary Fund released its updated World Economic Outlook. The IMF cut its global growth forecast to 3.1 percent for 2026, down from 3.3 percent before the war. The fund warned that prolonged fighting could push global growth even lower if energy prices stayed high and supply disruptions worsened. The IMF now projects U.S. growth at 2.3 percent for 2026, an increase from 2.1 percent in 2025 but below its earlier January estimate of 2.4 percent.
The contrast between the IMF’s caution and Bessent’s confidence highlights the difference in how the U.S. economy stands compared to many others.
- The United States produces record levels of oil and gas under policies that prioritize domestic energy output.
- U.S. crude oil production reached 13.6 million barrels per day in 2025, setting a new annual record.
- Forecasts for 2026 show it holding near 13.5 to 13.7 million barrels per day.
This energy independence reduces the direct hit from Middle East disruptions. Higher oil prices do raise costs for transportation and manufacturing, but American producers can increase output to help fill gaps left by restricted Iranian supplies. Bessent has noted in prior statements that the administration is working to bring additional barrels of oil to the global market. This includes measures to stabilize shipments through the Persian Gulf and avoid interventions in futures markets that could distort prices.
The timeline of events shows the war’s rapid economic pressure. Strikes escalated in late February 2026. By March, oil prices had jumped significantly, with some reports showing U.S. gasoline prices rising 7.5 percent to around $3.20 per gallon in certain areas. Some locations saw prices climb above $4 per gallon, the highest since late 2023. Inflation concerns grew as the consumer price index, which had shown some cooling, faced new upward pressure from energy costs. The Federal Reserve has held rates steady, and Bessent has supported a wait-and-see approach before any cuts. He stated the Fed is doing the right thing by monitoring the economy closely amid the volatility.
Bessent’s role as Treasury Secretary, confirmed in January 2025 after his nomination by President Trump, places him at the center of these responses. He has repeatedly emphasized that the U.S. has plenty of funds to support military operations without raising taxes. In March 2026, he told Congress and media outlets that supplemental funding requests were not about shortages but about ensuring the military stays well supplied. The administration built up defense capabilities in the first Trump term and continues that effort now. Bessent ruled out tax increases to pay for the conflict, calling such ideas ridiculous.
Despite the war, Bessent has pointed to structural strengths in the U.S. economy. These include pro-growth policies on taxes, trade, and regulation that were in place before the conflict. Earlier in February 2026, he told Fox News that the economy could grow at least 3.5 percent for the year. At that time, he expressed even higher hopes near 4 percent before the full scale of the war became clear. He later acknowledged some quarterly slowdowns but stressed a big catch-up potential once disruptions ease. The administration’s focus on adding oil production capacity, potentially three million barrels per day in line with broader goals, supports this outlook.
The war has created real costs.
- Global supply chains for energy face strain.
- Asian and European economies, more dependent on Middle East oil, face steeper challenges.
- The IMF noted risks of higher inflation and slower growth worldwide if the conflict drags on.
In the U.S., businesses with international exposure feel some pressure. Yet domestic energy production acts as a buffer. U.S. oil and gas output reached record levels in recent years through policies that opened up leasing and reduced regulatory burdens on producers. This output undercuts reliance on hostile regimes and helps stabilize prices over time.
Bessent has connected the conflict to longer-term security. He has said that addressing the threat from Iran could bring decades of stability to energy markets and the broader economy. Removing the source of regional terrorism and nuclear risks outweighs short-term economic pain, according to his public comments. He told one outlet that
concerns about a nuclear strike on a Western capital would cause far greater GDP damage than the current disruptions.
This view frames the war not just as a military action but as an investment in secure global trade routes and energy flows.
Evidence of resilience appears in market reactions. Stock markets dipped on initial war news but have shown recovery signs in some sectors. Defense and energy companies gained from increased demand. The dollar has held its position as the global reserve currency, reflecting confidence in U.S. fundamentals. Unemployment remains stable, and consumer spending continues despite higher fuel costs. Labor market data shows conditions consistent with trend growth, though some softening is expected if the conflict lengthens.
Critics and some forecasters, including private analysts at firms like ICIS and S&P Global, revised U.S. growth estimates downward to around 2.2 percent for 2026 because of the oil shock. They cite risks to inflation and delayed rate cuts. The administration rejects overly pessimistic views. Bessent has urged international bodies like the IMF to focus on core missions of financial stability rather than unrelated agendas. He has criticized global imbalances, such as large trade surpluses from countries like China, as bigger long-term risks than the current war.
The administration’s response includes practical steps.
- It provided insurance for crude carriers in the Gulf.
- It avoided direct intervention in oil futures to let physical supply adjustments work.
- Plans to unsanction certain Iranian oil flows under controlled conditions aim to boost available barrels without rewarding the regime.
These actions align with a strategy that maximizes energy to the world while maintaining pressure on adversaries.
The following table compares key growth projections for 2026 as of mid-April 2026:
| Source | U.S. GDP Growth Projection for 2026 | Global GDP Growth Projection for 2026 | Notes on War Impact |
| Treasury Secretary Scott Bessent | Exceeds 3%, up to 3.5% | Not specified | U.S. energy independence and domestic production buffer shocks; expects catch-up growth |
| International Monetary Fund | 2.3% | 3.1% (down from 3.3%) | Oil price spikes and supply disruptions; higher inflation risks if conflict prolongs |
| Pre-War IMF (January 2026) | 2.4% | 3.3% | Baseline before late February escalation |
| Private Analysts (e.g., Goldman Sachs, others) | Around 2.2% | Not specified | Downward revisions due to energy costs and potential delayed Fed rate cuts |
This table shows the gap between official international forecasts and Bessent’s assessment based on U.S.-specific strengths. The U.S. entered the war as a net energy exporter with production at record levels of 13.6 million barrels per day in 2025. Higher oil prices from the conflict add costs but also incentivize further domestic output, which many other nations lack.
Timelines matter. The war started in late February 2026. Bessent’s February comments on 3.5 percent growth came before the heaviest disruptions. His April 14 statement reaffirmed that target after weeks of fighting. This consistency shows confidence based on data the Treasury reviews daily, including production figures, trade flows, and fiscal capacity. The U.S. budget can absorb war costs without new taxes or damaging cuts to other priorities.
Implications extend beyond 2026. If the conflict resolves with reduced Iranian threats, energy markets could normalize faster. U.S. producers stand ready to ramp up. This would support the catch-up growth Bessent described. Even in a prolonged scenario, America’s energy independence and policy framework provide advantages not available to more vulnerable economies. The dollar’s strength and deep capital markets allow the U.S. to fund operations and investments without immediate crisis.
Bessent’s projection rests on facts. The U.S. entered 2026 with strong fundamentals from prior policy choices. Record energy production, rebuilt military capacity, and focus on domestic growth create a base that war disruptions test but do not break. Higher oil prices create some inflation pressure, yet core strengths in consumption, investment, and innovation limit the damage.
The ongoing Middle East war has raised legitimate concerns about energy costs and global stability. Treasury Secretary Scott Bessent’s assessment that U.S. growth can still exceed 3.5 percent demonstrates the resilience built into the American economy through energy independence and sound fiscal management.
