Iran War Threatens to Wreck Trump Dream of Lower Interest Rates

US Treasury yields surged in March 2026, marking the sharpest monthly decline in 10-year bonds since Trump’s re-election, undermining his push for lower interest rates amid escalating geopolitical tensions. The drop reflects investor anxiety over an Iran-linked energy crisis, which is disrupting global markets and forcing the administration to prioritize economic stability over monetary easing. Treasury Secretary Scott Bessent’s benchmark asset is under pressure as bond prices fall, signaling waning confidence in the government’s ability to manage inflation and energy shocks simultaneously. Trump’s economic agenda, centered on rate cuts to boost growth, now faces headwinds as war-driven volatility overshadows domestic policy efforts and tightens financial conditions. The crisis highlights how geopolitical conflicts can derail fiscal strategies, forcing policymakers to balance energy security with monetary goals in an increasingly unstable global landscape.