The Trump administration has appointed Treasury Secretary Scott Bessent to lead a dual economic offensive against Iran and the bond vigilantes. The strategy aims to get Iran to reopen the Strait of Hormuz to lower oil prices and inflation expectations, thereby relieving pressure on bond markets. Secondary sanctions will target countries and entities doing business with Iran, with Chinese companies buying Iranian oil particularly exposed. The initial $4 billion bond buyback plan proved insufficient against a $32 trillion Treasury market, but Bessent has access to a $950 billion Treasury General Account for larger interventions. This approach raises concerns about potential financial repression aimed at artificially keeping interest rates low.
Source: Read the original article
