In a climate of escalating tensions surrounding the Israel-Hamas conflict, U.S. Treasury Secretary Janet Yellen issued a warning, underscoring the need to avert the expansion into a broader conflict.
In an exclusive interview with Bloomberg News, conducted on the sidelines of the annual meetings of the International Monetary Fund and World Bank, Yellen stressed the gravity of the matter.
The imperative, as stressed by the U.S. Treasury secretary in conversation with Bloomberg journalists, is to ensure the conflict does not escalate further, and this remains the central priority for the U.S.
The gathering of global financial leaders in Marrakech, Morocco, had initially revolved around issues such as debt relief for impoverished nations and financing for climate change, but these priorities have been eclipsed by the deepening crisis in the Middle East.
Regional Fears And International Reactions
Meanwhile, in Israel, Prime Minister Benjamin Netanyahu addressed the nation, vowing determination in the face of the conflict. “We’ll never forget the atrocities that our enemies carried out,” he declared.
He emphasized that the fight against Hamas was just beginning, with more ammunition and weaponry en route to Israel, as reported by The Times of Israel.
On Friday, the Israel Defense Forces launched “widespread” airstrikes against numerous Hamas sites across the Gaza Strip, further escalating the situation.
The northern front of the conflict has also become embroiled. The Israel Defense Forces announced it is initiating fresh drone strikes on Hezbollah locations within Lebanon. This action came in response to the Iran-backed terror group’s claim of responsibility for targeting Israeli military positions along the Lebanon border with artillery fire last Friday.
UN Secretary-General Antonio Guterres called upon Israel to prevent a humanitarian disaster following the Israeli army’s directive for over one million individuals to evacuate northern Gaza.
Markets React to Rising Tensions
As tensions continue to escalate, global markets registered their concern on Friday.
The CBOE Volatility Index (VIX) spiked over 18%, reflecting increased market nervousness.
Gold, as tracked by the SPDR Gold Trust GLD emerged as the preferred safe-haven asset, rallying by 3%, while oil prices surged by 4.6%, driven by Saudi Arabia’s decision to put an Israel deal on ice amidst the war.
Bonds also served as a protective hedge, with the iShares 20+ Year Treasury Bond ETF TLT rising 1.6%.
In contrast, the stock market experienced losses, with the SPDR S&P 500 ETF Trust SPY falling 0.6%, and the tech-heavy Invesco QQQ Trust QQQ facing heavier losses, down 1.2%.
Chart: VIX Index Spikes Friday As Market Jitters Over Israel-Hamas Conflict Intensify
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