US government has spent $37.5B on Iran war so far, Hegseth tells Congress

Defense Secretary Pete Hegseth told the Senate Appropriations Committee that the US military conflict with Iran has cost roughly $37.5 billion to date.

The figure, disclosed during testimony on July 21, represents a meaningful jump from the approximately $30 billion estimate lawmakers received just weeks earlier.

The Pentagon’s growing tab

Hegseth’s testimony included a Pentagon request for supplemental funding in the range of $67 billion to $80 billion to sustain ongoing military operations.

The revised cost estimate reflects both actual expenditures and anticipated spending through the remainder of the fiscal year.

The hearing came against the backdrop of sustained US and Israeli strikes on Iranian positions, which have reportedly continued for 11 consecutive nights. Lawmakers pressed Hegseth on strategy, funding timelines, and the human toll, which includes American service member casualties.

What this means for markets

Energy markets have been the most obvious receptor for geopolitical anxiety. Iran’s role in global oil supply chains means any escalation, or even the perception of one, can whip crude prices around with impressive speed.

Bitcoin and Ethereum have both exhibited notable volatility as the conflict has progressed.

The fiscal overhang for crypto investors

A $67 billion to $80 billion supplemental funding request gets financed through some combination of additional Treasury issuance, budget reallocation, or political negotiation that could affect fiscal policy more broadly.

Increased government borrowing to fund military operations puts upward pressure on bond yields. Higher yields tend to strengthen the dollar and create headwinds for risk assets, crypto included.

Hegseth’s testimony suggested the conflict could extend for weeks or months. The revision from $30 billion to $37.5 billion in a matter of weeks suggests that surprises, at least on the cost front, are running in one direction.

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