TEHRAN – The ongoing war between the US-Israel alliance and Iran has plunged global economic policymaking into deep uncertainty.

The conflict is making monetary policy assessment "very difficult. "With no clarity on the war's duration or trajectory, forward planning has become nearly impossible.

Policymakers stress there is no transparency or certainty regarding key variables — especially how long the fighting will last.

That depends largely on ongoing negotiations and the extent of damage to energy production and transport routes across West Asia.

The Strait of Hormuz, a critical chokepoint for global oil supplies, remains a particular flashpoint.

There is no clarity, no certainty about the key factors, including the duration of the conflict. The outlook is very foggy for the moment.

The situation is very opaque, very cloudy. The fog extends to interest rate decisions.

European Central Bank officials say they have not pre-committed to any rate path, preferring a meeting-to-meeting approach as news from the battlefield arrives daily.

The war has made it quite difficult to assess what monetary policy will have to do.

Even under baseline scenarios, policymakers acknowledge their assumptions — such as the supply shock fading as quickly as it appeared — may not be realistic.

Inflation could rise more than 1.5 percent this year if the Strait is blocked or partially blocked, potentially triggering stagflation — a toxic mix of stagnant growth and rising prices. 

Central bankers now fear that the longer the conflict continues, the harder it will be to restore economic stability without sacrificing growth.

Until greater clarity emerges, the world's economic stewards are flying blind, watching West Asia and waiting for signs of a ceasefire.