Trump Threatens Iran Economic Warfare as US Debt Hits $40 Trillion

President Donald Trump threatened an "economic D-Day" and "economic warfare" against Iran and any nations trading with it following the breakdown of negotiations over the Strait of Hormuz. These threats drove Brent crude prices above $93 per barrel and created significant volatility across global markets.

In the United States, the national debt surpassed $40 trillion. To manage borrowing costs and lower long-dated government bond yields, Treasury Secretary Scott Bessent initiated debt buybacks, later announcing a plan to double these long-term purchases. This intervention complicated the tightening strategy of Federal Reserve Chair Kevin Warsh. Meanwhile, Bitcoin surged toward $78,150, fueled by institutional demand and Trump's support for the Clarity Act.

In the United Kingdom, the FTSE 100 remained largely stagnant through August 20 and 21. JD Sports Fashion experienced a sharp decline after lowering its 2027 pretax profit guidance to between £700 million and £800 million, though it saw a marginal rebound on Friday. Other UK market pressures included a Competition and Markets Authority investigation into Trainline's booking fees and a slump in Ashtead Technology due to Middle East conflict delays. Chancellor of the Exchequer Rachel Healey emphasized the government's commitment to fiscal discipline following reports of high borrowing and an unexpected 0.5% drop in July retail sales.