I recently noticed a rather contradictory phenomenon. On the one hand, the U.S. stock market is hitting record highs, and the S&P 500 index is surging strongly; on the other hand, IMF and World Bank officials repeatedly issue warnings at various meetings in Washington—that investors may be seriously underestimating the true impact of current geopolitical conflicts on the global economy.

This disconnect between optimism and warnings is quite interesting. U.S. Treasury Secretary Beccent is trying to describe the surge in energy prices as a temporary phenomenon, claiming that the war will eventually end and then costs will come back down. But at the International Monetary Fund’s spring meetings, this narrative is hardly believed by anyone. IMF Chief Economist Gurlinsa says plainly that global growth expectations have been cut from the pre-war 3.3% to 2.5%, and that this may not even be the floor. For every extra day that energy supply disruptions continue, we get one step closer to a worse scenario.

What truly worries people is not short-term price fluctuations, but structural change. Rising costs, longer trade routes, escalating geopolitical risks—these are quietly changing the underlying logic of the global economy. Qatar’s Finance Minister Kuwari said bluntly at the meeting: what we’re seeing is just the tip of the iceberg. He warned that in the next one or two months, energy price shocks could evolve into energy shortages in some countries, even affecting food production and semiconductor supply chains.

ECB President Lagarde also issued a similar warning, while World Bank President Banga emphasized that this should not be viewed as just another month of pain, but as a longer-term test. International Energy Agency Director Birol was even more direct: March will be very tough for the world, and April could be worse than March.

Why is the market still rising? Some analysts believe this precisely shows that the market is underestimating how serious the situation is. Investors have not fully recognized the deep impacts of supply chain disruptions, and combined with expectations of the “TACO” model (i.e., policymakers will retreat when market reactions are poor), FOMO-driven sentiment, AI optimism, and other factors, cautious voices are being drowned out.

There’s another key point: as an oil exporter, the United States is relatively less directly affected by energy shocks, which helps the U.S. stock market hold up relatively better. But IMF Managing Director Georgieva has clearly pointed out that other regions of the world are already enduring enormous suffering. Some economists, including analysts who have worked at JPMorgan and Bridgewater, are warning that this energy shock may be contagious like the COVID-19 pandemic—Asia feels the disruption first, now Europe is starting to feel it, and the United States will be next.

A deeper concern is how much resilience the global economy still has. After experiencing tariff shocks, the pandemic, and an escalation of the Russia-Ukraine conflict, debt levels have risen, and many governments’ ability to respond has been weakened. No one knows how far we are from the point of a true collapse.

Meanwhile, developing countries face even greater difficulties. When wealthy countries cut back on foreign aid, these countries have to absorb the most direct economic shocks, and in many countries, debt service spending has already exceeded the aid they receive. The G24 has called on the IMF and the World Bank to mobilize more resources.

There is a clear disconnect between market optimism and real risks. Perhaps that’s why seasoned economists like Christina Buksha are emphasizing that the biggest risk right now is not the obvious shock itself, but the collective underestimation by markets and policymakers of how severe this shock is. Once the chain reaction of energy supply disruptions spreads to global financial markets, the consequences could be far more complex than what people imagine today.