Jay Martin argues that Iranian parliament speaker Mohammad Ghalibaf’s “Straits Taylor Rule” post on September 16th, the day the Fed raised rates, was a real strategic warning: because Iran controls the Strait of Hormuz risk premium on oil, it can push the Fed into rate hikes that make America’s $40.1 trillion debt unsustainable. He traces the chain from a 60%+ jump in Brent crude in March and record diesel of $6.53 per gallon to 3.4% August inflation, the Fed’s first hike since 2023, 30-year mortgages back above 7%, and roughly $1.05 trillion in interest costs exceeding $833 billion in military spending, which puts America past what Niall Ferguson calls Ferguson’s Law. Martin contends America is countering with energy dominance and quietly benefits as Qatari, Saudi, Russian and Iranian supply goes offline, so both countries want expensive oil for opposite reasons, setting up a race between America’s clock of long-term energy contracts and Iran’s clock of Fed meetings, with October 28th as the next date to watch.
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The Straits Taylor Rule: Ghalibaf took John Taylor’s 1993 interest rate formula, added terms for the Strait of Hormuz (SOH) and Bab el-Mandeb (BAM), and wrote that you can’t “25 basis points a choke point.” His claim is that Iran sets the fear premium in every barrel, and since the Fed hikes on oil-driven inflation, whoever controls oil controls the Fed.
Attacks timed to Fed meetings: In the 10 days before September 16th, tankers were hit near Hormuz, Saudi Arabia’s Jizan refinery was struck on September 10th and 11th, Houthis seized the Bab el-Mandeb coast, and Iraqi drones forced Saudi Arabia to shut its East-West pipeline, pushing oil back above $100. The same pattern preceded the July meeting, when Houthi missiles hit two Saudi tankers and oil touched $100.
The cost cascade to households: Diesel, which moves about 73% of US freight, rose roughly 74% from $3.76 to $6.53, while urea fertilizer jumped 80% between February and April, airfares rose 23%, and energy prices were up 16% year over year. The average 30-year mortgage went from 5.98% on February 26th to 7.03% on September 24th, adding $276 a month, or more than $3,300 a year, to a $400,000 mortgage.
The debt spiral and Ferguson’s Law: Interest on the debt cost about $1.05 trillion in the first 11 months of the fiscal year, up 12%, versus $833 billion on defense, a line Ferguson says Spain, pre-revolution France, the Ottomans and interwar Britain crossed before losing great-power status, and which America crossed in 2024. Martin says the Fed must eventually either hike until housing, stocks or bonds break, or print money to buy its own bonds and debase the dollar, which is Iran’s bet.
America’s energy dominance counterplay: The US produced a record 13.6 million barrels per day in 2025, crude exports hit a record 5.6 million barrels per day in April 2026, Qatar Energy bought 33+ shiploads of American LNG to fill its own contracts, the EU pledged $750 billion in US energy purchases by 2028, and US firms got 100-year rights to 17 Venezuelan oil fields after Maduro’s January 3rd capture. Martin argues America starts the fights but lets others hit energy infrastructure, citing the Axios report that the White House approved Israel’s South Pars strike and the decision to spare the Kharg Island oil terminal, which gives it plausible deniability while Treasury Secretary Scott Bessent predicts Hormuz will become “just another body of water.”
