Treasury Chief Describes Iran Conflict as Two-Front Battle

Treasury Secretary Scott Bessent conveyed on Thursday that the situation with Iran resembles a two-front war. He emphasized to President Trump the importance of U.S. economic strength alongside military actions in the Persian Gulf.

Bessent mentioned during a Cabinet meeting at the White House, “We think the Iranians are fighting on two fronts. It’s a military conflict led by our exceptional forces, but they’re also attempting to manipulate the global economy by leveraging what we consider a non-existent hurdle that we’ll address.”

He added that the Treasury Department spent nearly a year strategizing the economic components of the U.S. response. Following Trump’s directive in March last year, the Treasury aimed to cut off all financial support to Iran, which eventually led to a significant downturn in the country’s financial system by December.

“This didn’t occur suddenly,” he clarified.

Oil Supply and Transportation Security

The Treasury Secretary reassured the energy markets, stating that the global oil supply is currently “well supplied.” He pointed out efforts to redirect supplies that had been stranded at sea, noting the Development Finance Corporation’s maritime reinsurance program will soon offer unparalleled security guarantees for commercial vessels navigating the Gulf.

Bessent remarked that even before the full security of the Strait of Hormuz, the number of ships passing through the area had already shown a daily increase.

Supporting his claims, energy prices have reflected stability. U.S. oil prices are over 30% lower than the heights seen early in the 2022 Ukraine conflict. Average gasoline and diesel prices are about 10% less under the current administration compared to President Biden’s term, while spot natural gas prices have dropped from $3.80 to below $3.00.

Early Interest in Tax Cuts

Bessent also brought attention to the positive early outcomes of the tax measures introduced through the One Big Beautiful Bill Act, a major fiscal initiative signed by President Trump last year.

According to data from the Treasury Department as of March 25, about 37.5 million individual tax returns, roughly 43.9% of the approximately 85.4 million submissions this season, included at least one benefit from the law, such as overtime or Social Security income deductions. Of these, around 19.5 million claimed the elderly exemption. Moreover, the average individual refund rose to $3,570, marking a more than 10% increase from $3,233 in the previous filing period.

Additionally, the tax benefit for children—the Trump Account—is being rolled out early, with over 2.6 million Form 4547s submitted for more than 4 million dependents. Approximately 984,000 of these dependents qualified for a $1,000 bonus deposit to support their new accounts.

Strengthening Dollar

Bessent noted that since the conflict escalated, the U.S. dollar has gained strength, reinforcing its status as the globe’s primary safe-haven asset. He remarked that capital is increasingly flowing into the United States, signaling confidence in its broader economic policies.

“Thanks to your initiatives, the American economy stands as the finest globally,” Bessent praised the president.

In response, Trump quipped, “Is this person the main character in the casting? His glasses are perfect, too.”