Trump threatens ‘economic warfare’ against Iran, impacting 2026 deal prospects

President Donald Trump has once again issued stern warnings to Iran, threatening “economic warfare” should Tehran fail to comply with U.S. demands. Despite these repeated threats, no military action has been executed. This development comes amid ongoing tensions between the two nations, as reported by the New York Times. Trump’s rhetoric appears to be aimed at exerting economic pressure rather than initiating direct military conflict, potentially impacting the likelihood of reaching a diplomatic agreement with Iran. The threat of economic measures rather than military action suggests a focus on non-violent strategies to influence Iran’s policies. Market participants appear to interpret these threats as reducing the probability of a successful U.S.-Iran deal in 2026. This is evident in the noticeable drop in the probability of Iran Reconstruction Funding being part of a U.S.-Iran deal, with the latest market data showing a decrease in confidence. Key Takeaways Market activity suggests Trump’s threats of economic warfare appear to decrease the likelihood of a U.S.-Iran deal in 2026. Current pricing indicates a decline in expectations for Iran Reconstruction Funding to be included in ...