War, No-War--What's Behind The Trump TACO Tango?

Yesterday Trump issued a tweet that—even by Trumpian standards was exceptionally juvenile. It seemed to signal an imminent attack on Iran—or something:

But that was followed by an explicit TACO tweet, for the time being. Trump said “two or three days, maybe next week.” He also mumbled something about wanting to sell the Brooklyn Bridge.

Trump: May Have To Give Iran Another “Big Hit” - It Has “Two Or Three” Days To Come To Table

President Trump has on Tuesday while fielding questions from reporters repeated his line that Iran is ‘begging’ for a deal. “They’re begging to make a deal. I hope we don’t have to do the war, but we may have to give them another big hit. We may have to give them another big hit. You’ll know very soon.”

His threat to give them another “big hit” was coupled with the assertion that he was just one hour away from ordering new attacks on Iran Monday, but was asked by Gulf allies to given diplomacy just a little longer:

Trump: “I was an hour away” from striking Iran on Monday.

There was also the below moment where he again talked timeline, saying he’s ready to resume military action in a few ‘days’ if Iran doesn’t comply:

Reporter: How many days does Iran have to come to the table?

Trump: Two or three days. Maybe Friday, Saturday, Sunday. Maybe early next week. A limited period of time.

What was behind Trump’s latest TACO move?

On the one hand, the NYT reports that the generals are getting cold feet:

Faytuks Network @FaytuksNetwork

Trump reportedly paused additional strikes on Iran partly over Pentagon concerns that Tehran was becoming more effective at tracking U.S. air operations and improving its air defenses - NYT

We do know that Iran has downed multiple drones in recent days, and what we don’t know may be even more concerning—tracking of manned air platforms, the ones that deliver stand off munitions. Presumably at least some of Iran’s seemingly enhanced capabilities are also due to Russo-Chinese support. This makes complete sense. And even the Israelis recognize that Iran holds the real high cards:

Iran Now Has More Incentive To Resist US Demands, Even If War Restarts: Israeli Think Tank

At this point even hawkish Israeli think tank pundits are increasingly admitting that Iran currently has certain leverage and an edge when it comes to dealing with the United States, and the so far stalled and failed peace talks to end the war.

…

Actually, the Israeli analysis (follow the link) has nothing new to offer. All they’re saying is that Trump’s latest TACO simply confirms basic insights that Iran has long held regarding Trump and the US. In other words, Iran has, once again, faced Trump down based on the same assumptions that they entered the war with. Their strategy has simply been borne out. And, as always, Iran’s trump card is control of Hormuz—something Trump should have considered long ago. It’s too late now.

On the other hand, economic/financial considerations—admittedly, triggered by the war—may well have played a role in the TACO. Trump obviously has no qualms about killing people and committing war crimes or even genocide. But we’ve also seen in the past that Trump’s tweets about a “deal” being near and other harbingers of peace have repeatedly been used to juice the financial markets when they get jittery over rumors of war. The bond market, in particular is getting very jittery, indeed—perhaps about more war or perhaps just in general. The fact is that rates of around 4.5% in the 10 year treasury market have appeared in the past to be the trigger for a TACO. So, consider:

Luke Gromen @LukeGromen

10y UST yield now up 70bps since Iran war started.

Or this:

The Kobeissi Letter @KobeissiLetter

Bond markets are flashing red.

Today, the US 30Y Note Yield officially hit its highest level since July 2007, at 5.19%.

This will soon become Americans’ biggest problem, yet the vast majority do not even know it is happening.

What is happening? Let us explain.

…

Zerohedge places this in the context of the price of oil, which is rising aggressively. Renewed war will only exacerbate what is unsustainable for the world economy:

“Door Of Doom” Looms As 30 Year Yield Soars To 19 Year High After Two Huge Treasury Block Sales

Bond yields continued to move sharply higher today, driven in large part by the aggressive repricing in the oil strip as markets (finally) price in a lengthy disruption to Hormuz traffic which has pushed year-end prices higher by about $12 in the past month.

The result has been a spike across virtually all tenors:

• *US 2-YEAR YIELD RISES TO 4.11%, HIGHEST SINCE FEBRUARY 2025

• *TREASURY 5- AND 7-YEAR YIELDS RISE 10 BASIS POINTS ON DAY

• *US 30-YEAR YIELD RISES TO 5.195%, HIGHEST SINCE JULY 2007

…

According to Bloomberg, the spike in 10 year yields was caused by two massive trades of 10 year bonds—that at a time when Treasury is struggling to auction off its issues.

But more importantly, the 30Y is about to rise above 5.20%, some 20bps higher than what Michael Hartnett warned in his last two Flow Shows is the "door of doom" red line for the bond market.

There may be something else—albeit related—going on, and that relates to the Jewish Nationalist effort to unseat Thomas Massie in KY today. Jewish Supremacist groups have lavished vast amounts of money on Massie’s challenger, who is running strictly on a War and More War platform. I’ve seen estimates for Jewish Supremacist spending on this campaign as high as $35M in total, with AIPAC contributing a good half of that. Yet the election remains very close. Massie appears to have a slight lead, despite all the money and last minute oppo research smears. What the polls have shone is reflected nationwide in GOP numbers: The MAGA vote is almost exclusively a Boomer vote now. Republicans under 65 don’t want war and are concerned about the erosion of the American way of life. No doubt Trump’s open avowal that he doesn’t care about the concerns of Americans regarding their cost of living—their cost of just getting by or making ends meet—has contributed to the polling situation.

Here’s my point. In the background to debates about Trump waging war on the world at the behest of Jewish Supremacists, while crushing Americans, there is also the related terrible economic news. For example:

Megatron @Megatron_ron

NEW:  Financial Times reports that Trump’s war has cost Americans an additional $40 billion in fuel which has exceeded the cost of repairing the country’s bridges or restarting the air traffic control system.

Gasoline prices in the US have increased by 51% to $4.51 per gallon and diesel by 54% to $5.65, the steepest rise among G7 countries.

The Kobeissi Letter @KobeissiLetter

BREAKING: Credit card serious delinquencies rose +0.4 percentage points in Q1 2026, to 13.1%, the highest since Q4 2010.

This is only below the 2010 peak of 13.7%, in the aftermath of the 2008 Financial Crisis.

Since Q3 2022, serious credit card delinquencies have surged +5.5 percentage points, even larger than the +3.9 point increase in 2007-2010.

Furthermore, student loan 90+ days delinquencies jumped +0.7 percentage points in Q1 2026, to 10.3%, the highest since Q1 2020.

Auto loan serious delinquencies increased +0.4 percentage points, to 5.6%, the highest on record.

US consumers are falling behind debt at a crisis pace.

American consumers are now facing 7%+ mortgage rates, 4%+ inflation, and a 30% loss in the purchasing power of the US Dollar since 2020.

The second half of 2026 is going to be interesting to say the least.