Blurred photos in Photos app on iMac

I haven't seen this with thumbnails, although preview sizes sometimes take a moment to load. It could be a storage problem. How much free storage do you have? Do you have at least 10% free storage on your Mac?

Do you use iCloud Photos? Do you use "Optimize Storage" with iCloud Photos?

If you go to Photos' Settings>General, is "Copy Items" checked? Like this:

Here are some other things to try in order to narrow things down:

• Restart the computer (of course)
• Re-start in Safe Mode. This bypasses certain potentially disruptive processes, and it often helps. Safe Mode is different for different computers, so see this: 

           Start up your Mac in safe mode - Apple Support 

• Use another library if you have one, or make a small test Library with a few pictures in it and see if the same thing happens. You can create a new Library by closing Photos and then option-clicking on the Photos icon.
• Make a new user and see if the same problem recurs with it.  This is a bit harder, because a new user can't access a different user's stuff. You would need to temporarily move your Library out of your own user's Pictures folder up to the general "Users" folder. 

The idea is to find out if the problem is with the Library, with your account, or with caches and login items, and stuff like that. One of these steps may fix the problem, but their failure to work also helps figure out what's happening.

Let us know what happens…

Are you using iCloud Photos and "Optimize Mac Storage" on your Mac? Or are you transferring the photos directly from the iPhone?