PNN – A report by an American newspaper indicates that the repercussions of warmongering against Iran have reached one of the most sensitive sectors of the U.S. economy.
According to the report of Pakistan News Network; a New York Times economic commentary warns that a war against Iran has not only driven up energy prices but has also transmitted the resulting pressures to the U.S. debt market—ultimately increasing financing costs for both the government and American households. The yield on 30-year U.S. bonds has hit 5.3 percent, and the author argues that the combination of war-related costs, a decline in foreign bond buyers, and rising government financing needs could trigger a structural shift in the U.S. economy. Key points from the report include the following:
1- The war drove up the cost of US capital
Rising gasoline and diesel prices resulting from the war with Iran have contributed to higher yields on US bonds and increased borrowing costs for the country.
2- Buyers have pulled back
China, Gulf States, and other traditional buyers of US Treasury bonds are no longer as eager to purchase them as they once were; a portion of the region’s financial resources is now being directed toward post-war reconstruction and economic diversification following the conflict with Iran.
3- The Cost of War Shifts to Debt
Nearly 20 percent of US government revenue is now spent on interest payments for the national debt. Rising rates mean fewer resources remain for sectors such as defense and healthcare.
4- A Shock Originating in Washington
The rise in US bond yields is not merely a domestic issue; higher Treasury rates have increased borrowing costs in the economies of US allies and placed pressure on the debt markets of countries such as Germany, Japan, France, and the UK.
5- Washington Re-enters the Market
The U.S. government has ramped up its program to repurchase long-term bonds in an effort to lower their yields—a move indicating that pressure in the debt market has become severe enough to compel the government to intervene directly.
6- Conclusion
This report demonstrates that the economic consequences of a war against Iran for the United States extend beyond rising gasoline prices, reaching one of the economy’s most sensitive areas: the debt market. Should high rates persist, the U.S. government will face heavier financing costs, while the pressure will also spill over into the housing, automotive, and household credit markets; in other words, a war originating in the Middle East has shifted a portion of its cost onto the government’s balance sheet and into the pockets of American citizens.