Trump would be making his last efforts to avoid escalation, says the analyst.
Tokic predicts a breakout in financial markets if US interest rates rise
The governments of the United States and Iran are holding negotiations to contain the war conflict that has continued since February 28, 2026.
The tension between both nations worsened between last weekend and yesterday, Tuesday, May 19. In the first instance, US President Donald Trump warned Tehran that Time to reach a negotiated exit is running out. Later, the president announced the cancellation of a military attack scheduled against Iranian territory for the same day yesterday.
Given this panorama, the researcher and financial advisor Damir Tokic offered an alarming perspective about the geopolitical future. «This could be the most difficult geopolitical situation in history. There is no solution, no basis to reach an agreement, but the escalation could be catastrophic,” the specialist warned regarding the stagnation of the peace talks.
The core of the crisis lies in the strategic and military sphere of the region. “Iran seems determined to maintain its nuclear program, but if the time needed to develop nuclear weapons is really measured in weeks, this cannot be allowed,” Tokic said. The analyst directly linked this technological advance with the direct position adopted by the White House.
«In my opinion, the time it would take for Iran to develop a nuclear weapon would possibly be measured in weeks; “There is no other reason why President Trump would be so involved in the Middle East war,” the specialist argued. The possibility that the Asian country completes its weapons raises alarms in the international community.
It is worth clarifying that Tokic follows, in his arguments, the official narrative of the United States and its allies, which justifies the attacks to stop an alleged nuclear program in progress. From Iran they deny that these are the real reasons. The Iranian ambassador to Spain, Reza Zabib, has said in a interview: “If they only focus on the economy, oil theft, tourism or fame for the elections, what we will have is war,”
Both sides refuse to give ground
The diplomatic paralysis responds to the conflicting goals of those involved in the conflict. “We are at a stalemate, and it is very unlikely that an agreement will be reached, unless one of the parties is significantly weakened,” said the researcher. This condition reduces the margin to agree on an effective truce in the short term..
On the one hand, the US strategy focuses on directly wearing down enemy infrastructure. «The United States can weaken Iran’s position through new military actions; that is the escalation option. The United States has also tried to weaken Iran through naval blockade, but this requires time and patience, which it lacks,” Tokic explained.
On the other hand, Tehran responds through economic pressure on Western countries. “Iran can only weaken the United States by imposing high economic costs on it through a sudden increase in the price of oil and an inflationary crisis, closing the Strait of Hormuz,” the expert pointed out about the dynamics of mutual retaliation.
The hostilities led to the closure of the Strait of Hormuz, a key shipping channel through which 20% of the world’s oil transits. This logistical interruption raised the price of Brent crude oil—reference for 70% of the global market—above $100 per barrel, a record value that has not been recorded since 2022.
Additionally, The conflict threatens to expand to other shipping routes vital for international trade.. If the confrontation intensifies, Iran could try to take control of the Bab el-Mandeb Strait, a route that connects the Red Sea with the Gulf of Aden and which channels a tenth of global merchandise trade.
This maritime maneuver responds to a defined strategic planning to disperse Western military resources. The intention of controlling this second step is “to make the United States focus its attention on two maritime fronts instead of one,” noted Mehdi KharatianIranian analyst and director of the institute for the revival of politics.
Effects of war on the economy and the market
The macroeconomic effects of this energy blockade already impact financial indicators worldwide. In the United States, the producer price index (PPI) rose to 6% year-on-year in April 2026, after 4.3% in March. Likewise, the consumer price index (CPI), which measures retail inflation among citizens, rose to 3.8%. Both data are the highest since 2023.
As a direct consequence of energy-driven inflation, the yield on the 30-year US Treasury bond rose. Yesterday, May 19, said interest rate reached 5.19%, its highest level since July 2007, as reported by CriptoNoticias. This movement reflects the demand for higher returns by investors in the face of inflationary risk.
This situation puts pressure on the actions of the Federal Reserve (FED), the central bank of the United States. “The effect of the war between the United States and Iran could also be catastrophic for financial markets, mainly through the sudden increase in interest rates,” Tokic projected due to the general acceleration in the prices of products and services.
In line with this, investment analyst Ed Yardeni commented that the FED will keep its monetary policy unchanged at the June meeting. However, the specialist warned that sees likely an increase in interest rates of a quarter of a percentage point during the call next July 2026.
For the bitcoin market, the evolution of this war conflict is of great importance. An environment of high interest rates negatively impacts its price, because state bonds offer attractive and safe returns, reducing the incentive for assets considered “risky” and causing the migration of capital towards fixed income.
Bitcoin experienced a 4% drop in the last seven days, falling from $81,000 to $76,900 today. This price is the lowest recorded by the crypto asset since last May 1, being 38% below its historical maximum of $126,000 reached on October 6, 2025.
In the short and medium term, the future of the global financial market and the price of bitcoin will largely depend on the resolution of this geopolitical stalemate. “Therefore, based on these observations, even the last attempt to avoid escalation is likely to fail, as both sides still feel they have the ability to obtain a better agreement through escalation,” Tokic detailed.
Latest peace attempt has little chance of success, according to Tokic
The analyst warned that the coming phase of the conflict could exceed the material damage previously observed. «It is very uncertain how the second round of the war between the United States and Iran would develop.
«The first round was relatively contained, focused mainly on military targets, with some damage to regional energy infrastructure. The next wave could be catastrophic,” he said.
The outcome of this crisis could force the international community to choose between assuming the economic costs of war or accepting a new balance of power. “If the United States simply withdraws, Iran will get a nuclear weapon. The question now is whether the international community, led by the United States, is willing to allow Iran to become a nuclear power,” the expert concluded.