U.S. Treasury Secretary Scott Bessent warned that Iran's economy is "on the ropes," pointing to runaway inflation, a plunging currency and the impact of sanctions. He echoed President Trump's warnings that the U.S. could respond strongly if Iranian security forces use lethal force against protesters. Rights groups say at least 25 people died in early unrest that began in Tehran's bazaar and quickly spread nationwide amid rising economic and political grievances. Iranian officials blame foreign-linked networks for incitement while the judiciary vows no leniency for those seen as aiding "enemies" of the state.
U.S. Treasury Says Iran's Economy 'On the Ropes' as Nationwide Protests Escalate
U.S. Treasury Secretary Scott Bessent listens prior to U.S. President Donald Trump (not pictured) signing an executive order on AI in the Oval Office at the White House in Washington, D.C., U.S. December 11, 2025. REUTERS/Al Drago
Speaking at the Economic Club of Minnesota on Jan. 8 in Golden Valley, U.S. Treasury Secretary Scott Bessent warned that Iran's economy is "on the ropes," citing soaring inflation, a collapsing currency and mounting strain from Western sanctions.
Bessent described the situation as "a very precarious moment," echoing President Donald Trump's public warning to Tehran not to use lethal force against demonstrators. "If they start killing people like they have in the past, I think they're going to get hit very hard by the United States," Trump told reporters aboard Air Force One.
Rights groups reported at least 25 people were killed during the first nine days of unrest that began in Tehran's bazaar over the plunging value of the rial and surging prices — the largest wave of dissent Iran has seen in three years. Protests have since spread nationwide amid public anger over economic mismanagement, sanctions and limits on political and social freedoms.
Iranian authorities have acknowledged the economic pain facing citizens but have blamed networks linked to foreign powers for stoking unrest. The nation's top judge warned protesters there would be "no leniency for those who help the enemy against the Islamic Republic."
Bessent said it was clear that "what had been an affluent society that still maintained a high standard of living is really crumbling," and he attributed much of that decline to sanctions and policy failures. He added it remained unclear how Tehran would finance any reconstruction of its nuclear program.
U.S. concerns about Iran's domestic crackdown and economic collapse come amid broader regional tensions. The administration has referenced earlier U.S. and allied strikes on Iranian nuclear sites as examples of firm action in the region.
Reporting: David Lawder in Minneapolis and Andrea Shalal in Washington; editing by Diane Craft.
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