Stiglitz warns U.S. faces stagflation risk amid Iran war and tariff shocks

Nobel laureate Joseph Stiglitz, a professor at Columbia University, has warned that the United States faces a stagflation risk amid the aftershocks of a war involving Iran. He delivered the assessment during an interview on the Money Matters podcast on the 11th of the month.

Stiglitz said inflation has been driven in large part by tariffs, and with the war now contributing to higher prices, economic growth is slowing. He argued that the U.S. economy has run on a short-term engine built around artificial intelligence, rather than on a sound, diversified foundation.

He cautioned that when accounting for shocks to oil and food prices in addition to tariff effects, the United States may confront a very difficult period ahead. The warning underscores how intertwined energy, trade policy, and broader growth dynamics can shape inflation and activity.

Regarding oil, Stiglitz noted that the United States is a crude exporter, but that higher global oil prices would still hurt the U.S. economy. While the energy sector could gain from price increases, he said it is nearly delusional to expect larger profits from energy firms to translate into lower prices for American consumers.

He drew a historical parallel to the 1970s oil shocks, describing them as a catalyst for deep global economic stagnation that took a long time to recover from. The comparison serves to illustrate how energy shocks and geopolitical disruptions can reverberate through markets and growth.

For U.S. readers, the discussion matters because inflation, energy prices, and growth influence consumer prices, monetary policy, and financial markets. The potential for a prolonged period of slow growth amid higher prices could affect supply chains, tech investment, and the broader economy.

Stiglitz is a Nobel Prize–winning economist and a longtime commentator on macroeconomic policy. The Money Matters interview provides one instance of how prominent economists assess the risks linking geopolitics, energy markets, and U.S. economic performance.