There has been no Iranian response against Israel for the overnight Israeli retaliation attack on the Islamic Republic. US officials have since confirmed that it was in fact an Israeli attack, yet all the while Iran’s leaders are trying desperately to downplay it, saying it inflicted no damage, and that several reported explosions were actually the result of Iran’s air defenses intercepting a few drones, particularly over the city of Isfahan, site of a key nuclear facility.

Importantly, as we predicted, Tehran is saying it has no plans for further retaliation following the oddly toothless, performative response from Israel. Officially, Iran and its state media are even referring to the attack incident as having been done by “infiltrators” while not readily naming Israel, also declaring that the aggression ‘failed’. So far, it is looking like none of Iran’s nuclear facilities were actually hit.

*Atomic energy production site in Bushehr, Iranian Presidency/ZUMA*

The only problem is the Israeli strike we anticipated was one that would further escalate tensions between the two countries, but this one seems to have been calibrated to not do that. Rather than immediately responding with its own missile attack, Iran responded with memes downplaying the effects of Israel’s strikes.

As a consequence, it doesn’t look like we’re going to get a big market move down in response this time. However…

Iran And Israel Are Launching Missiles At Each Other

Iran and Israel are launching missiles at each other. We’re so quick to downplay events today, we forget out extraordinary this is, and how extraordinarily risky it is. So far, it hasn’t set off an escalatory spiral, but it’s easy to see how it could. Maybe anti-aircraft fire disables a missile or a drone headed for empty desert and it hits an apartment building instead. Footage of hundreds of dead civilians forces Israel or Iran’s government to fire for effect next time, and we’re off to the races. So let’s game plan now what to do if that happens.

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