SAEDNEWS: The New York Times warns that the economic fallout from the war against Iran has moved beyond higher energy prices and into the U.S. debt market, pushing up borrowing costs for the government and American households.
According to SaedNews: The New York Times has warned that the economic impact of the war against Iran is no longer limited to energy prices, with pressure now spreading to the U.S. debt market and raising financing costs for the government and American households. The yield on 30-year U.S. Treasury bonds has reached 5.3 percent, while the combination of war spending, weaker foreign demand for Treasuries and rising government financing needs could bring a structural shift to the U.S. economy.
1- The war made U.S. borrowing more expensive
Higher gas and diesel prices resulting from the war with Iran have contributed to rising Treasury yields and increased borrowing costs in the United States.
2- Traditional buyers pulled back
China, Gulf states and other major buyers of U.S. Treasuries are no longer as eager to purchase them as before. Some funds in the region are now being directed toward reconstruction and economic diversification following the war with Iran.
3- War costs are reaching the debt
Nearly 20 percent of U.S. government revenue is now used to service debt interest. Higher rates mean fewer resources remain for areas such as defense and healthcare.
4- The shock spread from Washington
Higher U.S. Treasury yields are not only a domestic problem. They have also raised borrowing costs in allied economies and put debt markets in Germany, Japan, France and Britain under pressure.
5- Washington stepped back into the market
To push down long-term Treasury yields, the U.S. government has expanded its bond buyback program. The move indicates that pressure in the debt market has become serious enough to prompt direct government intervention.
6- Conclusion
The report argues that the economic consequences of the war against Iran for the United States have gone beyond higher gasoline prices and reached one of the country’s most sensitive areas: the debt market. If elevated rates persist, Washington will face heavier financing costs, while pressure could also spread to housing, automobiles and household credit—shifting part of the war’s cost from the Middle East onto the U.S. government’s balance sheet and Americans’ pockets.
