Iran War Already Increasing Gas Prices, Mortgage Rates
Last week, President Donald Trump shocked the world when he authorized targeted strikes against Iran while still negotiating terms over Iran’s nuclear capabilities. The consequences for this war are already being felt stateside as gas prices and mortgage rates have increased.
CBS News reports that gas prices have gone up on average by 26 cents since the war started. Patrick De Haan, a petroleum expert at GasBuddy, told CBS News that the increase represents an “unusually strong weekly climb.”
While prices dipped below $3 in December, they’ve been steadily rising as the conflict between Iran and the United States has begun to simmer. “Oil prices have been creeping up on the possibility of attacks,” De Haan told CBS News. “The actual attacks themselves, obviously, are a major escalation.” De Haan predicts that prices will continue to increase by another 10 to 15 cents in the upcoming week before stabilizing.
One of the key oil shipping routes is the Strait of Hormuz, which runs through Iran. The prolonged bombings have slowed shipments through the Strait of Hormuz to a crawl, with Iran’s counterattacks also impacting oil production in Saudi Arabia. De Haan estimates that the United States is losing access to 20 million barrels of oil supply a day as a result of the bombings.
“Nothing can replace that,” De Haan told CBS News.
Like many of us, I’ve seen the impact of the Iran war on gas prices firsthand. Two weeks ago, gas prices in my native area of Phoenix were around $3.15. Last week, when I filled my tank up on Wednesday, it was about $3.60. On Thursday night, as my best friend and I were driving home from a Joey Valence and Brae concert, we were both shocked to see gas prices had increased to $4.15 in just a day. Nothing quite kills a post-concert high like the realities of the U.S. economy.
The increases come just over a week after Trump bragged about how low gas prices have been during his State of the Union address. Trump was asked by Reuters if he had any concern about how the Iran war would affect domestic gas prices.
“I don’t have any concern about it,” Trump replied. “They’ll drop very rapidly when this is over, and, if they rise, they rise, but this is far more important than having gasoline prices go up a little bit.”
The lack of concern is crazy work, considering that affordability is one of the biggest issues facing Americans. We’re in the buildup to the midterm elections, and Trump has no concern about how his shortsighted actions in Iran. Polling shows that the majority of voters already disapprove of Trump taking military action in Iran. According to the Hill, a poll by Fox News also revealed that the majority of voters feel that Trump’s actions in Iran have made the United States less safe.
If it’s only been a week and the majority of people aren’t on board with the war, public opinion is only going to fall further as the war in Iran continues to negatively impact their wallets. According to NBC News, the effects have already extended past the gas pump, as mortgage interest rates have ticked up from 5.98% to 6.13%.
The reason the Iran war is affecting mortgage prices is that mortgage rates are heavily tied to the price of U.S. 10-year Treasury bonds. The yield on those bonds has increased as concerns rise that the war in Iran will lead to higher inflation. Should inflation increase, it could also lead the Federal Reserve to refuse to cut interest rates.
At a time when the average American is already struggling to afford the cost-of-living, and the labor market continues to contract, Trump decided to make that problem worse over weapons of mass destruction that Iran doesn’t even have.
Trump’s second term really feels like a monkey’s paw moment for Republicans. On paper, they’ve been getting everything they’ve wanted from mass deportation to a more hawkish approach to foreign policy, yet it’s only resulted in more widespread disapproval for the GOP.
SEE ALSO:
Everything We Know About The Conflict In Iran
No, The War With Iran Didn’t Happen Because Kamala Harris Lost
