Recently, the conflict between Israel and Iran has escalated, making the entire Middle East situation more tense. This war appears to be a regional conflict between the two countries, but in reality, it is intertwined with the complex game of global economics, financial markets, and even U.S. politics.
1. Conflict background: Long-standing grievances and real triggers
The hostile history between Israel and Iran has long been established. Iran supports anti-Israel armed groups such as Hezbollah and Hamas, while Israel fears that Iran's nuclear program threatens its own security. The confrontation between the two sides is not only a conflict of religion and ethnicity but also a struggle for regional hegemony and geopolitics.
The direct cause of this conflict, apart from the long-standing grievances between the two sides, is also related to Israel's ongoing attacks on Iran's nuclear facilities. Israel views Iran's nuclear capabilities as a "life-or-death threat" and is willing to strike first. At the same time, the Iran nuclear negotiations have repeatedly stalled, with both sides distrusting each other and slow progress, further intensifying the situation. The U.S., as Israel's staunchest ally, although publicly calling for peace, actually provides strong military and diplomatic support to Israel.
2. Iran's domestic contradictions and war capabilities
Iran faces severe economic sanctions and intense social conflicts, putting significant pressure on its regime and limiting its military actions abroad. Although Iran's military strength cannot be underestimated, whether it can win this war against Israel's precision strikes and the U.S.-Israel alliance remains uncertain.
3. Global economic and financial market chain reactions
As a major oil and gas exporting region, the Middle East's war has caused oil prices to soar, thus increasing inflation pressure. High oil prices directly raise transportation, manufacturing, and other costs, ultimately reflected in consumers. The rise in inflation is a heavy blow to the global economy and puts the Federal Reserve's monetary policy in a dilemma.
Especially as U.S. Treasury yields continue to rise, reflecting the market's uncertainty about future economic conditions and policies. Investors are wavering between risk aversion and seeking returns; the U.S. dollar remains a safe haven, but the volatility in the bond market indicates that risks are increasing.
4. Trump's political and economic calculations
As president, Trump has his own strategy in the face of the current situation. Although he previously advocated lowering oil prices to alleviate public pressure, the recent Middle East conflict has caused oil prices to soar, leading to huge profits for the energy sector, which is often a solid supporter of Trump.
The Federal Reserve is expected to cut interest rates in the second half of this year, originally to stimulate the economy and suppress inflation, but the war has driven up oil prices, which in turn increases inflation pressure and disrupts the pace of rate cuts. Trump, by supporting Israel, indirectly promotes the profits of energy giants while consolidating his support among key voter groups.
In short, Trump is using this conflict to create "war dividends," stabilizing the energy industry and voters in domestic politics while seeking a balance between economic policy and Federal Reserve decisions.
The conflict between Israel and Iran is not a simple regional war, but a complex event intertwined with geopolitics, great power games, economic markets, and multiple factors of U.S. domestic politics. The Iran nuclear negotiations have stalled due to mutual distrust, prompting the escalation of military conflict. The war raises oil prices, exacerbates inflation, affects U.S. Treasury yields and global financial markets, while Trump's camp seizes the opportunity to adjust its political and economic strategies, striving to profit from this volatility.
In the future, paying attention to the developments in the Middle East, the trend of oil prices, and the Federal Reserve's policy direction will be key to understanding global risks and opportunities.
