Washington: Treasury Secretary Janet Yellen warned Tuesday of potential global economic damage from rising tensions in the Middle East and pledged that the US and its allies won’t hesitate to use their sanctions powers to address Iran’s “malign and destabilizing activity” in the region.
She made her remarks ahead of this week’s spring meetings of the International Monetary Fund and World Bank, saying Iran’s weekend missile attack on Israel “underscores the importance of Treasury’s work to use our economic tools to counter Iran’s malign activity.”
She added: “From this weekend’s attack to the Houthi attacks in the Red Sea, Iran’s actions threaten the region’s stability and could cause economic spillovers.”
Iran’s missile attack on Israel early Sunday came in response to what it says was an Israeli strike on Iran’s consulate in Syria earlier this month. Israel’s military chief said Monday that his country will respond to the attack, while world leaders caution against retaliation, trying to avoid a spiral of violence.
As the IMF and its fellow lending agency, the World Bank, hold their spring meetings this week, high on the agenda are the fast-rising tensions between Iran and Israel and what escalation could spell for the global economy.
Israel and Iran have been on a collision course throughout Israel’s six-month war against Hamas militants in Gaza. The war erupted after two militant groups backed by Iran led an attack on October 7 that killed 1,200 people in Israel and kidnapped 250 others. An Israeli offensive in Gaza has caused widespread devastation and killed over 33,000 people, according to local health officials.
“We’ve targeted over 500 individuals and entities connected to terrorism and terrorist financing by the Iranian regime and its proxies since the start of the Administration,” Yellen said, citing sanctions against Iran’s drone and missile programs, militant groups Hamas, the Houthis, Hezbollah, and other Iraqi militia groups.
“Treasury will not hesitate to work with our allies to use our sanctions authority to continue disrupting the Iranian regime’s malign and destabilizing activity,” she said. “I fully expect we will take additional sanctions actions against Iran in the coming days.”
The annual gathering will take place as other ongoing conflicts, including Russia’s invasion of Ukraine, threaten global financial stability.