BYB Insights Exclusive
“You can ignore politics, but politics won’t ignore economics.” - Milton Friedman
The brief yet ferocious war between Iran and Israel in June 2025 laid bare a deeper fault line-not on the battlefield, but in the financial foundations of American power.
Once, geopolitical upheavals reliably triggered a flight to safety: a surge in U.S. Treasury purchases, soaring oil prices, and a global rush into the dollar.
This time, the reflexes faltered—and the world noticed.
Despite the intensity of the confrontation, bond yields remained elevated, oil prices spiked only momentarily before retreating, and the anticipated “safe haven” dynamic failed to materialize. Behind the scenes, the Federal Reserve was compelled to step in discreetly to stabilize debt markets.
The longstanding assumption-that geopolitical crises inherently reinforce U.S. financial dominance-no longer holds true. The dollar’s aura of invincibility, long shielded by conflict, is beginning to fracture.