US Economy Hit Hard as Gas Prices Soar Amid Iran War
The US economy is facing another affordability crisis due to rising gas prices and mortgage rates. The war in Iran and President Donald Trump's global tariff agenda are driving up costs across the country, sparking concerns of renewed inflation.
Gas prices have surged to $4.10 per gallon on Friday, with oil prices briefly surging above $100 per barrel this week after a reported attack on at least two tankers transiting the Red Sea. US crude oil has risen as high as $92 per barrel this week.
The rising fuel costs are putting pressure on consumers and financial markets alike, with U.S. Treasury yields rising to their highest level since January 2025. The average interest rate on a 30-year US mortgage rose to 6.85% on Thursday, its highest level since June 2025.
According to Mark Zandi, chief economist at Moody's Analytics, the war is costing the average household more than $1,200 per year. He estimates that gas prices are adding $360, groceries $240, and other transportation costs $110 to household bills. Higher interest rates add another $205.