Yields edge lower as Bessent shares “economic D-Day” plans. Treasury yields traded in a 3-4 bp range to as markets kicked off a busy week, with Treasury Secretary Bessent sharing plans today to economically isolate Iran, key PCE data and Nvidia earnings due Wednesday, and Fed Chair Warsh set to speak at the Jackson Hole Symposium on Friday. WTI crude settled around $85 per barrel following Bessent’s announcement, providing further relief for yields. The 2-year yield closed nearly flat at 4.23%, while the 10-year yield closed 4 bps lower at 4.70%. Meanwhile, equities fell as chipmakers slid, with the S&P 500 and NASDAQ closing 0.28% and 0.76% lower, respectively.
Bessent announces sanction campaign against Iran. Treasury Secretary Scott Bessent today outlined a plan to economically isolate Iran, vowing to “sever every economic pipeline” until Tehran “stands alone.” The sanctions aim to cut off “five of Iran’s most vital lifelines that it exploits in other countries: digital assets, technology, gold, aviation and shipping.” Bessent also warned that any country continuing to support Iran would face US penalties, though no specific measures were announced. Iranian Economy Minister Ali Madanizadeh downplayed the threat, saying Iran is “fully prepared for this economic war.”
Canada to impose reciprocal tariffs as US trade talks collapse. Canadian negotiators left Washington on Friday without a deal to prevent President Trump’s 50% tariffs on Canadian goods. The levies, which took effect on Saturday, cover an estimated $20 billion of exports ranging from wine and hockey sticks to cement. Both sides have blamed the other for the breakdown, as US Trade Representative Greer said today that negotiations fell apart after Canada “wanted more,” while Canadian Prime Minister Carney cited “last-minute changes,” from the White House. Canada has since announced $20 billion in reciprocal tariffs on US steel, dairy, electronics, and appliances, set to take effect September 8. The Canadian dollar fell as much as 0.6% on the news.
