Macroeconomic analyst Luke Gromen points out that before the U.S attacked Iran, 10-year Treasury yields were around 3.94% and oil was roughly $62.
Now oil is around $86, and the 10-year is pushing 4.7%, a level Luke says has repeatedly forced Washington to intervene in the markets.
First came intervention around the yen, then larger Treasury buybacks.
Now there's talk of expanding those buybacks further and potentially running down the Treasury General Account to support the long end of the bond market.
Luke describes it as plugging holes in a dam: every time Washington sticks its finger into one, another springs open.
And now Trump is launching the biggest financial offensive against Iran ever attempted.
Luke thinks that's pouring gasoline on the problem, because America's greatest financial weapon is also one of the foundations of its global power: The dollar.
Washington can cut countries off from the financial system, freeze reserves, sanction banks, and make it extraordinarily difficult for companies around the world to do business with America's enemies.
But every time the U.S demonstrates that another country's dollar assets can be frozen, restricted, or rendered difficult to sell, Luke argues it gives foreign governments another reason to ask a dangerous question:
Why are we storing our national wealth in an asset somebody else can decide we aren't allowed to use?
And according to Luke, that shift began long before Trump's latest Iran offensive.
@LukeGromen
