So now America is trying to block traffic through the Strait of Hormuz? The war in Iran keeps throwing up surprises. Donald Trump’s move comes after talks between the two countries broke down. “Most points were agreed,” he said—except the “only point that really mattered: NUCLEAR”. Our correspondent says there is still a chance of a deal. But there is also a real risk that things are about to get worse.

The war has already sent oil prices soaring, pushing up inflation in America and elsewhere. Price pressures were building even before the conflict. That will make life difficult for America’s next Fed chair, Kevin Warsh. Mr Trump wants interest rates cut—by a lot. Inflation may make that impossible.

What to expect in the week ahead:

▸Finance ministers from around the world gather in Washington on Monday for the spring meetings of the IMF and World Bank, with the fallout from the Iran war topping the agenda. The Fund’s twice-yearly flagship reports—the World Economic Outlook and the Global Financial Stability Report—are both due on Tuesday. No one expects an upbeat read: the war is hindering growth, lifting borrowing costs and causing higher food prices.

▸Earnings season begins for America’s biggest banks. Goldman Sachs reports on Monday, followed by JPMorgan Chase, Wells Fargo and Citigroup on Tuesday. With conflict in the Middle East and jitters over private credit shaking markets, bank shares are off to their worst start to a year since the regional-banking crisis of 2023. Lower valuations mean that a strong set of results could spark a rally.

▸Israeli and Lebanese diplomats meet in Washington on Tuesday. Lebanon, battered by Israeli strikes, is desperate for a ceasefire. But Israel won’t agree to one without assurances that Hizbullah will be disarmed—something the government would struggle to accomplish even if the fighting stopped. Hizbullah and Iran have threatened a coup if the government tries. Stuck between Israel and Iran, Lebanon has little room to manoeuvre.