Iran issues warning on military preparedness and potential economic consequences

Iran’s Government Emphasizes War Costs on US Households, Calls for Iranian Action

Tehran, Iran - Foreign Minister Abbas Araghchi stated that Iran remains prepared to resume direct military conflict with the United States if negotiations fail to produce acceptable results. In a series of messages to domestic and foreign audiences, Araghchi highlighted the impact of the ongoing war on US households.

US energy costs have increased significantly since the conflict began on February 28, resulting in the closure of the Strait of Hormuz, where around a fifth of the world’s oil and gas is normally shipped. This has led to rising inflation in the US, with prices for food, medicine, electronics, cars, and petrochemical products increasing substantially.

Araghchi warned that Americans would face higher borrowing costs if the threat of war continues, potentially leading to a recession. He also pointed out that auto loan delinquencies are at a 30+-year high. In a separate message, Parliament Speaker Mohammad Bagher Ghalibaf highlighted the financial cost of the war for Americans, criticizing the US government’s funding priorities.

The US government has auctioned $25 billion worth of 30-year bonds at a five percent yield, which has not been done in nearly two decades. Benchmark 10-year Treasury yields have also reached their highest level in about a year, with traders anticipating potential interest rate increases by the Federal Reserve to counter rising inflation on global energy markets.

A key sticking point in negotiations between the US and Iran is the future of the Strait of Hormuz. Iranian officials insist that any agreement must grant Tehran sovereignty over the waterway, while other Gulf states have rejected this demand. The Iranian parliament’s National Security Commission has announced plans to unveil a professional mechanism for managing traffic in the Strait of Hormuz along a designated route.

In Iran, food inflation has reached 115 percent, with many staples tripling in price over the past year. The rial has fallen to about 1.8 million to the US dollar in the open market, close to its all-time low registered earlier this month.

Source: Al Jazeera