Iran is going after America's debt it's targeting the $40T America owes

An Iranian political leader publicly altered the Taylor Rule - the formula central bankers use to set interest rates - by adding variables labeled for the Strait of Hormuz and Bab el-Mandeb, signaling a strategy: disrupt oil transit to drive global energy prices up, force inflation higher, and thereby pressure the Federal Reserve to raise rates. Recent attacks on tankers, Houthi control of Bab el-Mandeb and strikes on Gulf infrastructure pushed oil and diesel sharply higher (diesel rose from about $3.76 to $6.53 a gallon, roughly +74%), contributed to a 3.4% year-over-year CPI with energy up 16%, and coincided with the Fed’s September 16, 2026 rate hike. That hike raised borrowing costs across mortgages and auto loans (median 30-year mortgage up from 5.98% to 7.03%, adding roughly $276/month on a $400,000 loan), while failing to remedy supply-driven price shocks.

Those rate increases also amplify America’s financing burden: with roughly $40.1 trillion in debt, higher rates make interest spending balloon (about $1.05 trillion in the first eleven months of FY2026 versus $833 billion on defense), a dynamic likened to historical imperial decline. Iran’s aim is to weaponize chokepoints to force a painful Fed choice - keep tightening until markets crack or relent and debase the currency - while U.S. policy counters with an “energy dominance” push (record 13.6 mbd crude in 2025 and rising LNG exports) even as Gulf strikes have removed significant export capacity (about 17% of Qatar’s gas).