By Damian Paletta
Good morning. Iran is wreaking havoc on global energy markets by:
1. Effectively shutting down the Strait of Hormuz. 2. Damaging or destroying energy facilities across the Middle East.
This isn't a strategy to repel the U.S.-Israeli bombing campaign. But it is causing chaos in the region and driving up the price of oil everywhere. It could, ultimately, have a lasting impact on the U.S. economy by causing a recession.
Consider: The coalition military effort to drive Saddam Hussein out of Kuwait in August 1990 was one factor that drove up energy prices and coincided with an eight-month recession, which technically began in July 1990 and lasted until early 1991. It was, as far as these things go, a mild recession, but many experts think it played a role in helping Democrat Bill Clinton defeat Republican incumbent President George H.W. Bush in 1992.
Many factors can cause a recession. But existential shocks (the financial crisis or Covid, for example) can hit the economy suddenly and with tremendous force.
President Trump has suggested, at times, that this war will end soon. If it does end quickly, a key question will be whether all the damage done to energy facilities can be quickly repaired or if a three-week (longer?) war might end up leading to a multiyear energy mess. And a recession.
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People and Policies I'm Watching
Iran war. Follow live updates. The U.S. and its allies are intensifying the battle to reopen the Strait of Hormuz, sending low-flying attack jets over the sea lanes to blast Iranian naval vessels.
Trump's Friday: The president is expected to hold executive time at 8 a.m. ET, present a trophy at 10:30 a.m. and hold a policy meeting at 1:30 p.m., before departing the White House for Palm Beach, Fla.
What I'm Following
Trump is seeking a more low-key approach to mass deportations. In talks with top advisers and his wife, Melania, the president has become convinced that some policies have gone too far and voters don't like the term "mass deportation." White House chief of staff Susie Wiles, who thinks the immigration team has turned a marquee issue into a political challenge, is among those pushing for the reset.
There's skepticism in Congress as the Pentagon plans to seek more funding for the Iran war. The Pentagon wants an additional $200 billion for operations, including flying combat missions and replenishing munitions. Senate Majority Leader John Thune said it "remains to be seen" whether it can pass, and Senate Minority Leader Chuck Schumer blasted the idea.
Post by post, Trump is providing real-time narration of the war on social media. The president has posted on Truth Social nearly 90 times about Iran, Israel and other war-related topics since the conflict began, which adds up to roughly a quarter of his feed. He cajoles allies, pounds on foes, reassures Gulf states and conducts his own unique form of online diplomacy.
What Else Is Happening
-- The war with Iran has put the U.S. on a collision course with some of its
closest allies.
-- A federal panel approved a commemorative gold coin design featuring Trump,
endorsing the rare step of putting a living, sitting president on
American money.
-- AI companies have plunged into the election-influence game, with a
Manhattan congressional race proving a prime example.
-- America's biggest banks would be allowed to hold billions of dollars less
in capital on their books under new proposals introduced by the Fed.
What I'm Reading
-- Victory in Iran Depends on More Than U.S. Military Dominance (The
Federalist)
-- How Graham Platner Is Using TV Ads to Drown Out Janet Mills's Attacks
(Bangor Daily News)
-- Fetterman's Vote Allows Senate Panel to Confirm Trump's Pick to Run
Homeland Security (Pittsburgh Post-Gazette)
This Week in Washington History
In 1988, Marine Lt. Col. Oliver North and former national security adviser John Poindexter were indicted on conspiracy, fraud and theft charges related to the Iran-Contra scandal. The Reagan administration sold arms to Iran, a sworn enemy, in the mid-1980s to obtain Iran's help in getting American hostages freed by Lebanese captors. Both convictions were later overturned.
About Me
I'm Damian Paletta, The Wall Street Journal's Washington coverage chief. I've covered Washington for 22 years as a reporter and editor. I've covered the White House, Congress, national security, the federal budget, economics and multiple market meltdowns.
WSJ Politics brings you an expert guide to what's driving D.C., every weekday morning. Send your feedback to politics@wsj.com (if you're reading this in your inbox, you can just hit reply). This edition was curated and edited in collaboration with Joe Haberstroh and Dick Streuly Got a tip for us? Here's how to submit.
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March 20, 2026 06:59 ET (10:59 GMT)
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