Iran War Predicted to Fuel US Inflation and Deplete Munition Stockpiles

The Congressional Budget Office (CBO) has released an analysis estimating that the US war with Iran will increase inflation by roughly 0.5 percentage points in the first quarter of 2027.

This projected spike is largely driven by higher energy costs due to the conflict, which has intensified since the CBO completed its analysis.

The CBO estimates that the war has already cost approximately $38 billion through August 1, with most of the price tag coming from munitions expenditures.

Replacing the expended munitions is estimated to be the largest single component of costs, at around $21.7 billion, including land-attack cruise missiles and missile defense interceptors.