Iran is reportedly increasing its military funding, suggesting preparations for a potential future conflict with the United States and Israel. This boost in military expenditure follows the 2026 conflict between Iran and the US-Israeli coalition, which led to a temporary ceasefire but no lasting resolution. Market pricing suggests a decreased likelihood of a US-Iran deal in 2026, as the increased military spending is viewed as inconsistent with diplomatic resolution. Observers note that Iran’s military preparations may indicate a posture of confrontation rather than de-escalation. Key actors include US President Donald Trump and Iranian Foreign Minister Javad Zarif.
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