The US Treasury is threatening to cut off anyone who trades with Iran, including China and Gulf allies, which would be bad news for markets, oil, and anyone paying interest on a loan.

• Scott Bessent says Washington will block every source of Iranian revenue and target any bank that helps move Iranian oil money.
• Iran's biggest trading partners are China, the UAE, Turkey, Iraq, India, and Russia, so following through means sanctioning much of the world at once.
• Bessent hinted he is close to hitting a major bank, which could freeze up other banks tied to it and spread a crisis the way Lehman did in 2008.
• The threats came with no names and no deadline, and Iran is publicly betting the US is too weak economically to go through with it.
• The turn to money follows a stalled war: US oil reserves are at a 50-year low, weapons stocks are thin, and government debt is near $40 trillion.

Outlook: Expect more loud threats than actual sanctions, with Treasury trying to hold down bond yields and hold off any real financial shock until after the midterms.