Tehran, Iran (CNN) The prospect of US retaliatory strikes has loomed over Iranian conversation for days. But with daily problems so desperate, reactions in Tehran to escalating tensions with the US have been somewhat muted.

Speaking to people in the bazaars of Iran's capital city, there is clearly a fear that the ongoing situation could develop into violence. But on the other hand, the economy is severely struggling under the weight of sanctions , and simply getting by is a more immediate concern than war.

Since the United States abandoned the 2015 Obama-era nuclear agreement and then re-instituted economic sanctions, Iranians have felt the squeeze -- with incomes decreasing rapidly or dissolving altogether.

The older generations have lived through these challenges before. They witnessed the war between Iran and Iraq and they've had 40 years of sanctions. They've seen it all before, hence there is a more measured reaction to the impulsive moves from Trump.

General Amir Ali Hajizadeh, Iran's Head of the Revolutionary Guard's aerospace division, looks at debris from a downed US drone reportedly recovered within Iran's territorial waters on Friday.

This may also be why tensions in countries around Iran appear to have ramped up in recent weeks, with rocket strikes in Iraq and tanker attacks in the Strait of Hormuz. No one really knows who the various perpetrators are but it all contributes to making life here a little more uneasy.

Iran's leadership have said from the very beginning that if the US strikes the country militarily, they will respond in kind -- and there's no reason to believe that that's not the case.

Iran doesn't have the firepower that the US has or the technology to match, but it does have loyal proxy forces in the region and a ballistic missile program. In downing a US drone earlier this week, Iran signaled to the US that it was willing to escalate further in their home turf.

The fundamental issues driving the rhetoric and hostility between the two nations is unlikely to be resolved soon. There is a lot of stick being waved at Iran, and really not much in the way of a carrot

Iranian thinking ultimately comes down to: Why should they trust the Trump administration and agree to new negotiations? The US is not easing sanctions to entice Tehran to come back to the table and Iran's leadership believes Washington would demand high concessions from them for a new agreement.

So, the stark reality in Iran remains the same: Even with financial insecurity rife Tehran sees little immediate upside in negotiating -- making it very difficult to find an offramp from the current escalation.