UBS warns Trump action on Iran could worsen US debt outlook
Mar 4th 2026
UBS says recent US strikes on Iran raise near-term risks for oil and shipping and could increase military spending, compounding the fiscal hit from mandated tariff refunds and straining the federal debt trajectory.
- Higher oil prices from the Middle East escalation could push up inflation and living costs.
- Attacks near the Red Sea risk disrupting global shipping and raising trade costs.
- Urgent military operations and weapons replenishment may add to the US budget deficit.
- A Supreme Court ruling forces roughly $175 billion in tariff refunds, cutting federal receipts.
- These combined pressures could make it harder to slow the growth of the $38.5 trillion national debt.