‘Only the beginning’: World losing faith in US financial system says Araghchi amid US debt meltdown

Iranian Foreign Minister Abbas Araghchi says the world is losing faith in the US financial system, citing Washington’s failure to control its bond market as the economic repercussions of the war in Iran begin to bite.

In a post on his X account on Friday, Araghchi said the US Treasury secretary had been openly celebrating efforts to impoverish the Iranian people and bring down Iran’s economy.

However, he added, Washington’s economic pressure had instead left the Treasury secretary “powerless and exposed” as confidence in the US financial system declines globally.

“Meltdown over cost of funding U.S. debt is only the beginning,” the top Iranian diplomat warned.

The comment comes as mounting inflation, soaring borrowing costs and a record $40 trillion national debt deepen pressure on the US economy. The Guardian reported Thursday that the yield on 10-year US Treasury bonds has climbed to 4.8%, its highest level since 2023, while mortgage rates have risen above 6.6%. 

The bond-market turmoil reflects growing investor concerns over inflation, the US-Israeli war on Iran and the sheer scale of US government debt.

As investors demand higher returns to hold US Treasuries, borrowing costs are rising across the economy, putting further pressure on households and businesses through more expensive mortgages, car loans, credit cards and business lending.

The strain has persisted despite a $6 billion Treasury bond buyback aimed at calming markets, which provided only brief relief.

With the national debt now above $40 trillion and the war pushing up energy prices and inflation, economists and investors are warning that higher prices and borrowing costs could become harder to contain. 

War on Iran pushes US debt toward $40 trillion as borrowing costs surge

The US national debt is set to cross $40 trillion earlier than previously expected as higher oil prices, inflation concerns, rising government borrowing and uncertainty over massive AI investments drive long-term bond yields higher across major economies.

Meanwhile, Washington has launched a campaign to isolate Iran economically, after the US-Israeli military failed to achieve their war objectives. 

On August 24, the United States unveiled the new wave of illegal sanctions against Iran under the so-called “Operation Economic Outcast,” threatening secondary penalties against any country or entity maintaining trade ties with Tehran in a failed attempt to achieve through economic coercion what its military aggression could not.

US Treasury Secretary Scott Bessent announced the new "economic terrorism" campaign, absurdly comparing it to the D-Day Normandy landings of World War II.

Bessent said the measures target Iran’s financial networks worldwide and warned that no partner is beyond Washington’s reach.

US sanctions on 27 Iranian airlines constitute 'economic terrorism': Iran's UN envoy

A senior Iranian diplomat says new US sanctions on 27 Iranian airlines and aviation-related entities constitute a form of economic terrorism.

On Tuesday, the US Treasury Department imposed new sanctions on 27 Iranian airlines, including Iran Aseman, Iran Airtour, Kish Air, Qeshm Air, Zagros, ATA, Varesh, Sepehran, Chabahar and other airlines operating in Iran.

According to the Treasury Department, the measures also target 35 companies and one individual, with foreign intermediaries linked to Iranian airlines in Turkey, Malaysia, Kazakhstan and the United Arab Emirates among those affected.

In a letter to UN Secretary-General Antonio Guterres and the president of the Security Council on Wednesday, Iran’s Ambassador and Deputy Permanent Representative to the United Nations Gholamhossein Darzi condemned the fresh US sanctions on Iranian airlines and aviation-related entities, calling them a form of “economic terrorism, collective punishment and a crime against humanity.”

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