The Next Financial Shock to Come From Trump’s War With Iran

Photo: President Donald Trump speaks to Fed Chair Jerome Powell during a tour of the Federal Reserve in Washington, D.C., Thursday, July 24, 2025. Photo credit: Official White House photo by Daniel Torok via Flickr. US government work. Article by Logan McMillen. The New Republic – March 26, 2026.

Let’s set the scene. The U.S. government is staring down a projected $1.9 trillion deficit for this fiscal year, with the total national debt now pushing $39 trillion. Simultaneously, the expanding war in Iran and the subsequent crisis in the Strait of Hormuz have fractured global energy supply chains, driving Brent crude to $119 a barrel and sparking a massive inflationary shock. By any standard metric of sovereign risk, a state that is rapidly accelerating its debt issuance while engaging in a war of choice that is throttling the worldwide supply of oil should be facing the possibility of having its bonds repriced. […]

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