Trump's Iran War Drives Bond Investors to Demand Higher Yields — SkimNews
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- Global government debt has risen fivefold since 2000, with US federal debt alone doubling past $40 trillion in the past decade despite bipartisan refusal to rein in deficits.
- Iran is squeezing the Strait of Hormuz with drone strikes, keeping regional oil supply below global demand and steadily pushing prices higher despite US tanker escorts.
- Trump's war on Iran is failing to break the regime — Iran's economy lies in ruins but there is no sign of collapse — and Tehran has decided negotiation is pointless since Trump breaks his word.
- Bond investors are demanding higher yields now to offset expected inflation, as rising costs for diesel, gasoline, and Gulf-produced fertilizers threaten to push inflation higher this autumn.
- Trump is caught between an inflation spike that could trigger a recession and a withdrawal that would expose him to ridicule, making an exit unlikely despite his clear desire to leave.
Why it matters: With US federal debt at $40 trillion and growing, even a modest rise in bond yields dramatically increases debt-servicing costs for governments already strained by aging-population and defense budgets. Iran's refusal to negotiate — rooted in its judgment that Trump breaks his word — means the inflation pressure driving yields higher is likely to persist, squeezing rate-sensitive sectors like housing and farming.
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