US likely to avoid large-scale combat with Iran, focus on economic pressure

CNBC reports that Bessent has stated the United States will likely avoid restarting large-scale combat operations with Iran, instead shifting focus toward increasing economic pressure. This development comes amidst a fragile pause in the ongoing conflict between the U.S. and Iran, which saw direct combat earlier in the year. Current efforts for a ceasefire or interim deal have reportedly stalled, suggesting a strategic pivot to sanctions and diplomatic isolation. Market activity reflects this shift, with decreased optimism for a resolution involving significant economic aid or reconstruction funding in a potential deal. Key Takeaways Bessent’s comments appear to suggest a U.S. strategy focused on economic pressure rather than military escalation. Market pricing indicates a reduced likelihood of Iran reconstruction funding being part of a 2026 US-Iran deal. Current odds for a US-Iran deal including reconstruction funding have dropped, reflecting skepticism about a comprehensive resolution. What to Watch Observers will be closely monitoring any announcements from U.S. President Donald Trump and Iranian Foreign Minister Javad Zarif, as well as ongoing mediation efforts by Qatar and Pa...