Bessent's portfolio grows as his team shrinks

In response, the United Arab Emirates announced on Wednesday the suspension of trade with Iran, severing a critical economic link. White House allies view this as the type of action the U.S. hopes other nations will emulate, acknowledging the limited direct measures available to the U.S. to impact Iran's economy, which is currently struggling with high inflation, fuel shortages, and rising food prices.

One individual close to the White House described the strategy as "smart" and a "non-military, non-bomb related way to get on this," crediting Secretary Bessent for creativity and persistence in leveraging U.S. economic power. However, Bessent faces a "terribly challenging job" due to both the geopolitical situation with Iran and turmoil in bond markets. The U.S. government's borrowing costs have reached levels not seen in nearly two decades, influenced by the conflict's impact on oil prices, overall debt volume, and competition from entities investing in AI infrastructure. These intersecting factors complicate the department's portfolio management, especially as its staff ranks are diminishing. For instance, Christina Skinner, who served as a key liaison with the private sector on AI matters, is set to depart the department for academia.