Over the weekend, Scott Bessent wrote an article in the FT: "An economic D-Day is coming for Iran" - here are the key takeaways:
• The US Treasury secretary announces an unprecedented campaign to impose “total financial isolation” on Iran, describing it as an “economic D-Day” following the degradation of Iran’s military and nuclear capabilities. • The strategy extends beyond Iran itself. Washington will target every country, company and financial institution that buys or transports Iranian oil, processes its payments, registers its ships or aircraft, or facilitates sanctions evasion. • Iran’s remaining partners face a binary choice: sever their links with Tehran and retain access to global capital, or risk secondary sanctions, financial isolation and treatment by Washington as “global pariahs”. • The objective is to eliminate every economic lifeline supporting the Iranian regime—potentially weakening it to the point of collapse—while avoiding further direct US military intervention. • The message is also a deterrent: American enforcement is no longer negotiable, and any Iranian attack against US forces or Gulf allies would trigger a rapid and decisive military response. Bottom line: This signals a major escalation from sanctions on Iran to a direct ultimatum against the entire network supporting it—with potentially significant consequences for oil flows, global trade, inflation and relations between the US and Iran’s economic partners.
Meanwhile…..
Agricultural commodities are now at their highest level in a decade. Yet another unintended consequence of higher energy prices. Watch the Fed be forced to walk back its hawkish stance even as inflation continues to creep higher. Source: Tavi Costa
Federal Reserve now owns more than half of all U.S. Treasuries maturing within the next 10-15 years
Source: Barchart
Nvidia $NVDA is reportedly in talks to invest multiple billions of dollars into Perplexity at a $30+ Billion valuation
Source: Evan
It looks like agentic AI has created another ChatGPT moment...
source: Ark Invest
Gold and Bitcoin are rallying in tandem as investors take fright at Treasury Secretary Scott Bessent's politically clumsy interventions in the bond market.
Gold has jumped to $4,519/oz, while Bitcoin is back above $72,000. When confidence in policymaking is shaken, both analog and digital gold benefit. Source: Bloomberg, HolgerZ
Yesterday, the Federal Reserve has released the minutes from its July FOMC meeting.
Several officials favored a rate hike, while many said further tightening may be needed if inflation does not decline.
This is very Unusual.
We saw crazy decoupling this week with crypto and stocks going in completely opposite directions. Total Crypto market cap is up +13% after adding $291 billion. Meanwhile US stocks erased -$1.4 Trillion in the same period with S&P 500 falling -1.83%. Source: Bull Theory
