Investment bank report "causes trouble again," Bessent angrily criticizes JPMorgan Chase, which claims that U.S. vessel insurance is "insufficient to handle Iran risks"

U.S. Treasury Secretary Yellen Again Publicly Criticizes Wall Street Investment Bank Analysts, This Time Targeting JPMorgan Chase

On March 6, Bloomberg reported that JPMorgan analysts evaluated in a report that the U.S. International Development Finance Corporation (DFC), a government agency, lacks sufficient capacity to cover the actual risks associated with insuring Persian Gulf oil tankers, implying that the agency’s “firepower is too weak.”

Yellen immediately responded on Fox Business Channel, calling the report “terrible,” an “irresponsible analysis,” and stating it is based on a “completely false assumption.” This marks Yellen’s second public criticism of Wall Street investment bank analysts in less than two months.

The background is that the Trump administration is actively pushing to restore shipping order through the Strait of Hormuz. Earlier this week, Trump ordered the DFC to provide reasonably priced insurance for Persian Gulf oil tankers to ensure trade flow. On Friday, the White House further announced a $20 billion reinsurance plan aimed at revitalizing shipping activities through the Strait of Hormuz.

JPMorgan Report: DFC’s Capacity “Insufficient”

According to Bloomberg, JPMorgan analyst Natasha Kaneva and others released a report on Wednesday that quantified DFC’s insurance capacity.

The report estimates that, under current loan limits, DFC still has about $154 billion in remaining capacity. Meanwhile, the analysts calculated that the “maximum insurance gap” that the private market in the Persian Gulf currently cannot provide is approximately $352 billion. Comparing the two, DFC’s available funds are far below the potential risk exposure, leading the report to conclude that DFC’s “firepower” is “too small” to handle Iran-related risks.

Yellen Responds: Assumptions Are Fundamentally Flawed

Yellen challenged the analysis fundamentally. On Fox Business, she stated, “I can’t tell you how wrong that is,” directly calling the report “terrible” and “completely irresponsible.”

Her core rebuttal is: DFC’s insurance coverage does not need to extend beyond the point when ships leave the Strait of Hormuz and the Persian Gulf.

She explained that, “Once ships leave the strait and the Gulf area, they can revert to regular insurance—so (JPMorgan’s calculations) are based on a completely false assumption.”

In other words, Yellen believes JPMorgan overextended the coverage scope in their calculations, leading to exaggerated figures.

Yellen’s Ongoing Tensions with Wall Street

This attack on JPMorgan Chase is not Yellen’s first public confrontation with Wall Street analysts. Bloomberg reported that less than two months ago, Yellen publicly criticized a Deutsche Bank analyst.

The analyst had written in a report that, given Trump’s threats to Greenland, Europe might reduce its holdings of U.S. assets. Yellen strongly refuted this.

Both incidents follow a pattern: When Wall Street analysts’ reports question the Trump administration’s policies or implementation, Yellen chooses to respond directly in public rather than through conventional channels.

This approach has created rare public tension between the Treasury Secretary and investment banks, drawing high market attention to policy communication methods.

$20 Billion Reinsurance Plan Implemented

On the same day Yellen made her criticisms, according to Wallstreetcn, the Trump administration announced a $20 billion reinsurance plan to address external concerns about shipping risks in the Strait of Hormuz.

Before the DFC reinsurance plan was announced, President Trump stated on Tuesday that he had instructed the DFC to provide “very reasonable” prices for political risk insurance and financial security guarantees for all maritime trade passing through the Gulf, especially energy trade.

Analysts believe this move directly responds to the regional tensions triggered by the U.S. and Israel’s attacks on Iran, Iran’s retaliatory actions, and the resulting damage to commercial shipping insurance markets.

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