Tensions in the Middle East continue to escalate. According to recent reports, on the afternoon of March 22 local time, the Israeli Defense Forces announced they had begun "large-scale" airstrikes on Hezbollah infrastructure in southern Lebanon. Israeli Prime Minister Benjamin Netanyahu stated that Israel will pursue leaders of Iran's Islamic Revolutionary Guard Corps.

Simultaneously, retaliatory military actions initiated by Iran continue to advance. The public relations department of Iran's Islamic Revolutionary Guard Corps announced on March 22 that it had utilized "new tactics and upgraded operational systems" to strike US military bases in the Middle East and central and southern regions of Israel.

Financial markets are highly focused on the impact of the Middle East conflict on the global economy. In a newly released report, Goldman Sachs warned that global assets have only fully priced in an "inflation shock," while ignoring the devastating blow that high energy costs could inflict on global economic growth. Goldman Sachs has also comprehensively downgraded growth forecasts for 2026 for major economies including the United States and the Eurozone.

Israel: "Large-Scale" Airstrikes On the evening of March 22, according to CCTV News, the Israeli Defense Forces stated that afternoon that they had commenced "large-scale" airstrikes on Hezbollah infrastructure in southern Lebanon.

The Israeli Defense Forces also announced that a senior commander of Hezbollah's elite Radwan force, Abu Khalil Balji, was killed on March 21 during an Israeli airstrike targeting southern Lebanon.

Separately, according to Xinhua News Agency, Israeli Prime Minister Benjamin Netanyahu said on March 22 that Israel would pursue leaders of Iran's Islamic Revolutionary Guard Corps.

Responding to media questions in the southern Israeli city of Arad, which was hit by an Iranian missile attack, Netanyahu stated that Israel is "pursuing IRGC leaders with great force, targeting their facilities and economic assets."

Netanyahu outlined two "clear objectives" for Israel: the "complete destruction" of Iran's nuclear and missile programs, and creating conditions for "regime change" in Iran.

Over the past three weeks, several commanders of Iran's Islamic Revolutionary Guard Corps have been killed in attacks.

Missiles launched by Iran hit the southern Israeli cities of Dimona and Arad on the evening of March 21, injuring 175 people, 10 of them seriously. A Xinhua reporter at the two attack sites on March 22 observed severe damage to multiple buildings, with collapsed walls in some rooms and construction materials and glass shattered on the ground.

Meanwhile, Iran's retaliatory offensive continues. The public relations department of Iran's Islamic Revolutionary Guard Corps issued a statement on March 22 announcing the 74th wave of the "True Promise-4" operation, utilizing "new tactics and upgraded operational systems" to strike US military bases in the Middle East and central and southern Israel.

The statement said Iran used multiple types of missiles, including the "Emad," "Fattah," and "Ghyam," as well as drones, to strike the US Navy's Fifth Fleet base, the Prince Sultan Air Base used by US forces in Saudi Arabia, and strongholds of Kurdish armed groups.

The statement added that military bases and security centers in Tel Aviv, Petah Tikva, Holon, Ramat Gan, and other locations in Israel were hit by Iran's heavy missiles, including the "Qadr," "Karrar," and "Khorramshahr-4," causing "severe damage."

The statement emphasized that if enemies attack densely populated areas or energy infrastructure in Iran, Iran's response will be "beyond expectations."

Goldman Sachs Warning In its latest flagship macro report, "Top of Mind," Goldman Sachs warned that global assets have only fully priced in an "inflation shock," while ignoring the devastating impact high energy costs could have on global economic growth.

The report stated that the "deadlock" in the Strait of Hormuz suggests the war will be extremely difficult to end in the short term. Once market expectations are proven wrong, a "growth downturn (recession)" will be the "second shoe to drop," at which point global asset pricing could experience a violent reversal.

Based on the risk of the crisis becoming prolonged, Goldman Sachs has comprehensively lowered its 2026 growth forecasts for major economies including the US and the Eurozone, raised inflation expectations, and significantly delayed its projection for the next Federal Reserve interest rate cut from June to September.

Data from Goldman Sachs' commodities team quantifies the historic scale of the shock: estimated disruptions to oil flows through the Persian Gulf have reached up to 17.6 million barrels per day, accounting for 17% of global supply. This scale is 18 times the peak disruption of Russian oil in April 2022. Actual flow through the Strait of Hormuz has plummeted by 97%, from a normal level of 20 million barrels per day to just 600,000 barrels per day.

Goldman Sachs warned that if persistently low flows keep the market focused on long-term disruption risks, Brent crude oil could potentially break through its 2008 all-time high. Historical data shows that four years after the five largest supply shocks in history, production in affected countries remained, on average, more than 40% below normal levels. Given that approximately 25% of production in the Persian Gulf region comes from offshore operations, the engineering complexity implies an extremely long recovery cycle for capacity.

Goldman Sachs senior global economist Joseph Briggs proposed a key "rule of thumb": a $10 per barrel increase in oil prices would reduce global GDP by more than 0.1%, raise global headline inflation by 0.2 percentage points (with greater impact in some Asian countries and Europe), and increase core inflation by 0.03 to 0.06 percentage points.

Goldman Sachs pointed out that by this calculation, the three weeks of disruption have already dragged global GDP down by approximately 0.3%. If the disruption lasts 60 days, it could lead to a 0.9% decline in global GDP and push up global prices by 1.7%. Combined with the significant tightening of global financial conditions by 51 basis points since the war began, the risk of an economic slowdown is rising sharply.

Goldman Sachs believes the core variable in this crisis is no longer the intensity of US military action, but the timeline for the resumption of navigation through the Strait of Hormuz.