What has Happened:

• This evening, President Trump announced that the U.S. “successfully” hit three nuclear sites in Iran, including Fordow, Natanz, and Isfahan.
• B-2 bombers were used in the operation, although the White House did not specify what types of bombs were dropped; presumably the GBU-57 bunker buster bombs were used, which weigh 30,000 pounds each.
• Accelerating the timeline was likely U.S. Intelligence Community estimates that Israeli attacks only set back Iran’s nuclear program by about six months and further Israeli attacks were unlikely to do more damage.
• The U.S. is prepared for any Iranian retaliation following Iran’s Supreme Leader Ayatollah Ali Khamenei warning to the United States on Wednesday that strikes targeting the Islamic Republic will “result in irreparable damage for the U.S.”
• With respect to proxy activity, Iranian-backed Houthi rebels in Yemen said they would resume attacks on U.S. vessels in the Red Sea if the Trump administration joined Israel’s military campaign.
• President Trump in his address from the White House this evening said the intent of the strikes was the destruction of Iran’s nuclear capacity and warned of further attacks if “peace does not come quickly.”

Why it Matters:

“The calculation now is one of deterrence. How does Iran weigh its assessment of Israel’s capacity to continue its operations post these B-2 strikes vs. Israel’s assessment of Iran’s capacity to respond. Battle Damage Assessment (BDA) will determine immediate next steps. It’s safe to assume these strikes were ‘one and done’ with respect to the massive ordinance penetrators. It’s now up to Israel to take the next steps in this campaign.” – General Spider Marks

“Responses from Iran could be as broad as globally, or even nothing, if this serves as a deterrent (which I don’t know that it does). This is truly unprecedented. It will be interesting to see what Iran acknowledges regarding BDA. I suspect Israel has enough access to assess whether the U.S. penetrated the mission space at Fordow. I expect we’ll know more in the next 24 hours.” – General Robert Ashley

“BDA will drive next strike options. I know forces in the region are prepared for Iranian supported militias and ready. POTUS comments will help us understand what is next. I suspect he will seek immediate surrender. I expect the Israelis are deciding whether to kill Khamenei as well. I also assume some air sampling will occur as well to determine radiation and other toxic gas releases” – General Frank Kearney

“Make no mistake about it, the Iran we have known for the past 45 years, since the inception of the Islamic Revolution in 1979, no longer exists. The Israeli campaign will decimate all elements of Iranian power, be it surrogates, ballistic missiles, long-range and short-range missiles, and their launchers, command and control systems, as well as the leadership and supporting facilities and infrastructure. This is the broader objective beyond the nuclear threat. It will take a decade, if not more, for the country to reconstitute any components of their power projection. Just as important, this reinforces to the world and the Iranian people that this repressive and brutal regime is not omnipotent and is vulnerable. American support at this critical moment is essential in the broadest context to make the most of this spectacular opportunity to redefine the region.” – Admiral Robert Harward

“The Iranian regime will almost certainly find it necessary to respond to the ‘great Satan’ before being able to even consider talks. Unlike in the wake of previous operations against Iran, where Tehran has said it will respond at a place and time of its choosing, they will see a need to respond quickly to prove that they are still in charge. Tehran’s cards are limited, but they still have dangerous retaliatory options, including attacking U.S. interests in the region. The Houthis have already said that they will resume attacks in the Strait of Hormuz. Military and civilian targets, including U.S. citizens and businesses, are going to be on the table. Iran has previously tried to conduct operations in the U.S. and Europe, and they will see this as a legitimate option as well.” – Linda Weissgold, Former CIA Deputy Director for Analysis

“If the Israeli strikes have not hit the short-range Iranian missile fleet, this would seem to be the biggest kinetic risk to U.S. bases in the Gulf States. Different open sources estimate that fleet has as many as 2,000 missiles. As Linda points out, Iranian cells could also attack U.S. citizens or businesses in Europe or elsewhere. The homeland is not immune to infiltration and reprisal attacks, either. The Israeli killings of key IRGC, Quds Force, and intelligence officials may hamper these efforts.” – General Rick Waddell

“Tonight’s strikes confirm the unmatched capabilities of the U.S. military. This was a very difficult mission to plan and execute and one that our very best pilots, weapons officers, targeteers, and weaponeers seem to have executed flawlessly. Bomb damage assessments will continue to determine if there is a need for a reattack. The mission was executed under complete surprise using many forms of deception and without any press leaks. The air supremacy that the Israeli air force achieved and maintains allows for retargeting and any follow-on attacks. The skies over Iran are open if Iran decides to seek retribution by attacking U.S. forces in the Middle East. The attacks signal to U.S. adversaries that would challenge the U.S. that President Trump should be taken seriously. Iran was warned over and over and tonight was the expected result. Russia and China are on the sidelines watching in awe knowing that their ‘limitless partnership’ could not execute a military mission like this. President Trump continues to offer peace to Ayatollah Ali Khamenei that so far has fallen on deaf ears. The Ayatollah has lost any leverage he had after the U.S.-Israel combined operations that appear overwhelmingly successful. The challenge will be how a cornered autocratic dictator like the Ayatollah reacts. We have seen throughout history that dictators are often willing to take down their regimes even when the result is inevitable. While China and Russia have been quiet, so too have been the Arab states sending a signal that this opens potential opportunities to grow economies throughout the Middle East.” – General Robert Walsh

“Will China ‘allow’ Iran to disrupt oil distribution? Our view is that while Iran will likely retaliate, the risk to widespread, long-term disruption of the flow of oil is limited and manageable.

Oil prices will rise, but the administration could do much to offset that (rapidly deregulating, or removing tariffs from key suppliers, like Canada).

While this helps Israel in their efforts, all indications are that this helps the vast majority of Middle East countries who are looking to move beyond regional conflicts and fossil fuels to revitalize their economies for decades to come (the Saudis and Data Centers are front and center).

Stocks are likely to be under pressure (probably want to buy the dip). If Treasuries open lower, you want to buy higher yields hand over fist.

While a lot could go wrong from here, the reality is that this could further reshape the region. It could loosen the restrictions within Iran. But, maybe more likely, it could free the region to conclude the Abrahim Accords and break out of a decade-long rut. There is reason to be very optimistic about the potential shift in the global economy in the aftermath of the strikes.” – Peter Tchir, Head of Macro Strategy

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