The Iran war doesn’t seem to be hurting the U.S.

At least not as much as everyone else, it would seem.

The renewed conflict in the Middle East shouldn’t make anyone happy. However, if there’s a silver lining to be had, it’s that the U.S. economic outlook still looks pretty solid.

The International Monetary Fund (IMF) released a report on Wednesday with evaluations of various countries and how much they’re expected to grow over the next year and a half. According to its calculations, America’s energy production and technology investments are buoying its GDP – and will continue to do so until at least 2027.

It predicts 2.3% growth this year, which is unchanged from its April prediction, and 2.2% next year – which is actually up 0.1%.

The situation isn’t so ideal elsewhere in the world, however. Spain tops the non-U.S. expectations list with a forecast of 2.1% for 2026 and 1.8% for 2027. But otherwise, the IMF expects:

  • Canada’s GDP to expand 1.1% and 1.7%, respectively

  • The U.K.’s 1% and 1.3%

  • Germany’s 0.7% and 1%

  • France’s 0.6% and 0.9%

  • Japan’s 0.6% and 0.7%

  • Italy’s 0.5% both years.

On the plus side, “The global economy as a whole has, so far, weathered the shock from the war better than feared,” the IMF reported. But as with the U.S. specifically, some of that better-than-expected analysis is due to AI investments alone.

The rest, I suppose, is a gift horse we just shouldn’t look in the mouth.

Worse off than we could have been

Speaking of GDP, Federal Reserve Governor Christopher Waller was over in Rome on Monday at a Bank of Italy conference. There, he gave a planned speech titled, “Two thoughts on the transmission of monetary policy.”

According to him, central banks should be careful about setting policy based on anything but current facts and figures. That’s because historical averages and future predictions can turn out to be more of a bane than a boon.

This is a lesson he learned “during the rapid escalation of inflation” in the U.S. after the shutdowns:

❝

Based on past experience, a considerable share of the economic profession believed that the rapid tightening of financial conditions needed to bring down inflation would unavoidably cause a sharp increase in unemployment. And while this expectation was a good summary of what had happened in the past, in 2022, it was a poor predictor of what would happen from tightening policy because initial conditions at that time were so different.

In short, the employment situation was largely unaffected after the pandemic dust cleared because companies had previously been trying to fill an enormous number of positions. So they coped with the changing times by simply eliminating the openings, not already existing jobs.

As such, the Fed’s interference did an unnecessary amount of damage. The same goes, Waller believes, for its decision to leave rates so low for so long even while inflation was spiking so badly. Because the central bank was so focused on the future, it failed to act appropriately in and for the present.

Those few who follow the Fed very closely won’t be too shocked by Waller’s comments. He’s been stating much of it since 2022.

Still, it does give some insight into what U.S. monetary policy might look like in the months to come. As this week’s Fed minutes indicate, we might not be getting a rate cut until next year…

But the rate hike many expect might not happen either.

Apple gives more business to America

It appears Apple (AAPL) is making good on its pledge last year to invest $600 billion into the U.S. economy. As it explained in a press release on July 8, it’s been working with the Trump “administration and businesses across the U.S. to help create an end-to-end silicon supply chain in America.”

Those efforts now include a multiyear, $30 billion (or more) deal with Broadcom (AVGO) – its main hardware supplier for wireless products. According to the agreement, Apple will spend $1.5 billion to help expand an existing Broadcom manufacturing facility in Fort Collins, Colorado.

Once the modifications are made, the plant will begin producing advanced radio frequency components as well as advanced wireless connectivity technologies… which will necessitate hundreds of job openings.

This isn’t to say it’s completely giving up on cheap Asian labor, mind you. While it’s been busy shifting its manufacturing arm out of China for years, it also has production facilities in Vietnam and India. And even as of March 2025, it had chosen the latter for its main U.S.-bound iPhone assembly needs.

In fact, Apple is still expanding its business reach in India this year.

Still, this newly announced $30 billion investment into Colorado is good news for a country that, let’s face it, could use some more job openings coming its way.

Happy SWAN investing!

Brad Thomas
Editor, The Wide Moat Daily

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