{"id":31,"date":"2026-05-12T21:36:32","date_gmt":"2026-05-12T21:36:32","guid":{"rendered":"https:\/\/movinginsiderusa.com\/?p=31"},"modified":"2026-05-12T21:36:32","modified_gmt":"2026-05-12T21:36:32","slug":"why-the-iran-war-is-hurting-the-economy","status":"publish","type":"post","link":"https:\/\/movinginsiderusa.com\/?p=31","title":{"rendered":"Why the Iran war is hurting the economy"},"content":{"rendered":"

There isn\u2019t much Congress or Trump can do about it, experts warn.<\/strong><\/p>\n

\n
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Fuel, food and other essential items are getting more expensive as the Iran war drags on \u2014 and could be hard to bring back down, economists say. (Spencer Platt\/Getty Images)<\/figcaption>\n<\/figure>\n

The war in Iran isn\u2019t just raising gas prices. It\u2019s also helped push inflation<\/a> to its highest level in three years, according to new government data out Tuesday.<\/p>

Read more South Carolina Republicans block plan to eliminate Clyburn\u2019s House seat<\/a><\/p>\n

The White House says these price increases are temporary. \u201cThe gas will go down as soon as the war is over,\u201d President Donald Trump said a few weeks ago. \u201cIt will drop like a rock.\u201d<\/p>\n

But some economists worry higher prices are here to stay for the foreseeable future, even comparing the situation to the pandemic or the oil-driven economic crisis of the 1970s.<\/p>\n

Here\u2019s what\u2019s going on and what can be done about it.<\/p>\n

You\u2019re reading The 5-Minute Fix newsletter, explaining the day\u2019s biggest political news. <\/i>Get it in your inbox every weekday for free.<\/i><\/a><\/p>\n

High fuel prices make it more expensive to ship food, which is raising the cost of groceries. Heating and cooling is also more expensive. All of this feeds inflation; higher energy prices are a main driver of the recent increases in prices, report<\/a> The Washington Post\u2019s Andrew Ackerman<\/a> and Federica Cocco<\/a>.<\/p>\n

The conflict in Iran is also preventing goods from getting where they need to go, which could soon leave stores shelves emptier, said Diane Swonk, chief economist with the tax and accounting firm KPMG.<\/p>\n

\u201cThe closure of the Strait of Hormuz is more than an energy shock,\u201d she said. \u201cIt\u2019s a supply chain shock, and it\u2019s got a tail that will last long after the strait reopens. It\u2019s disrupting and roiling supply chains that echo the pandemic.\u201d<\/p>\n

Inflation hasn\u2019t fully come down since the pandemic, said Michael Strain, an economist with the right-leaning American Enterprise Institute, who says the Iran war and Trump\u2019s tariffs are only aggravating it \u2014 and making the cycle harder to break.<\/p>\n

When gas prices suddenly spike, businesses raise prices and consumers start pulling back, which manifests inflation.<\/p>\n

\u201cInflation is a largely psychological phenomenon,\u201d he said, \u201cand so if consumers and workers and businesses expect inflation, it will be higher than the Federal Reserve\u2019s target.\u201d<\/p>\n

Swonk said this inflation and supply chain shock could reverberate beyond grocery stores and the pump. Soon petroleum-based products, which are in everyday household items, could be more expensive. And she pointed to the abrupt shutdown of Spirit Airlines<\/a> <\/a>earlier this month over skyrocketing jet fuel prices as a warning of what more could come.<\/p>

Read more Amid war, Trump says he doesn\u2019t \u2018think about Americans\u2019 financial situation\u2019<\/a><\/p>\n

\u201cIt accelerated one airline in the United States going belly up, where people literally had to disembark planes on the tarmac,\u201d Swonk said. \u201cThat\u2019s extraordinary.\u201d<\/p>\n

There\u2019s bipartisan talk of suspending the federal gas tax to try to help. The government taxes gasoline <\/a>to help pay for highway maintenance and repairs. Many states also levy their own gas tax.<\/p>\n

It could help on the margins. The federal gas tax is just about 18 cents per gallon, and the cost of gasoline has risen almost $3 since the war started in February.<\/p>\n

But suspending the federal tax could come at a high cost, economists say. The tax helps pay for much-needed highway maintenance and repairs, and it hasn\u2019t kept up with inflation. So the Highway Trust Fund it feeds is struggling and could run out money by 2028<\/a>.<\/p>\n

The Constitution says only Congress can declare war, so Democrats in Congress have pushed several times for a resolution that would stop Trump from fighting in Iran.<\/p>\n

Republicans have mostly opposed this, but with the war increasingly weighing on Americans\u2019 pocketbooks, it\u2019s possible some Republicans join with Democrats to vote to limit what Trump can do in Iran, my Post colleagues report.<\/a><\/p>\n

A new CNN-SSRS poll<\/a> finds 77 percent of Americans say Trump\u2019s policies have increased the cost of living in their community, including a majority of Republicans.<\/p>\n

And even some economists in Trump\u2019s orbit are acknowledging that gas prices could remain high long after the war ends.<\/p>\n

\u201cGetting back to $3 gas is going to be quite a challenge,\u201d Stephen Moore, an economist and longtime Trump adviser, told <\/a>my Post colleagues.<\/p>\n

It\u2019s also not clear how the war ends, said Rosa Brooks, a national security expert at the Georgetown University Law Center. The CIA secretly assessed that Iran has the ability to keep fighting for months, The Post reported last week.<\/a><\/p>

Read more Justice Dept. charges shipping company in deadly Key Bridge collapse<\/a><\/p>\n

\u201cI\u2019d say we are firmly in quagmire territory,\u201d Brooks said.<\/p>","protected":false},"excerpt":{"rendered":"

There isn\u2019t much Congress or Trump can do about it, experts warn<\/p>\n","protected":false},"author":1,"featured_media":29,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-31","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-interesting"],"yoast_head":"\nWhy the Iran war is hurting the economy - Moving Insider USA<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/movinginsiderusa.com\/?p=31\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Why the Iran war is hurting the economy - Moving Insider USA\" \/>\n<meta property=\"og:description\" content=\"There isn\u2019t much Congress or Trump can do about it, experts warn\" \/>\n<meta property=\"og:url\" content=\"https:\/\/movinginsiderusa.com\/?p=31\" \/>\n<meta property=\"og:site_name\" content=\"Moving Insider USA\" \/>\n<meta property=\"article:published_time\" content=\"2026-05-12T21:36:32+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/movinginsiderusa.com\/wp-content\/uploads\/2026\/05\/d124a21a8b77adca8ec9fe50477aecd9-scaled.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"2560\" \/>\n\t<meta property=\"og:image:height\" content=\"1707\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"admin\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"admin\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/movinginsiderusa.com\\\/?p=31#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/movinginsiderusa.com\\\/?p=31\"},\"author\":{\"name\":\"admin\",\"@id\":\"https:\\\/\\\/movinginsiderusa.com\\\/#\\\/schema\\\/person\\\/22d40ab81790f6a361021763bb56ef03\"},\"headline\":\"Why the Iran war is hurting the economy\",\"datePublished\":\"2026-05-12T21:36:32+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/movinginsiderusa.com\\\/?p=31\"},\"wordCount\":812,\"commentCount\":0,\"image\":{\"@id\":\"https:\\\/\\\/movinginsiderusa.com\\\/?p=31#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/movinginsiderusa.com\\\/wp-content\\\/uploads\\\/2026\\\/05\\\/d124a21a8b77adca8ec9fe50477aecd9-scaled.jpg\",\"articleSection\":[\"Interesting\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\\\/\\\/movinginsiderusa.com\\\/?p=31#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/movinginsiderusa.com\\\/?p=31\",\"url\":\"https:\\\/\\\/movinginsiderusa.com\\\/?p=31\",\"name\":\"Why the Iran war is hurting the economy - 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