The U.S. military actions against Iran are directly transmitting costs to ordinary American households through oil prices. The rapid rise in gasoline prices not only undermines Trump's core political commitment to suppress inflation but also casts a shadow over his economic agenda as the midterm elections approach.
According to data from the American Automobile Association (AAA), the national average price of regular gasoline rose to $3.109 per gallon on Tuesday, which is not only higher than the level when the Biden administration left office but also a significant jump from $2.951 a week ago. The pressure in the wholesale market is even more pronounced—RBOB futures have surged from about $2.30 last weekend to $2.50, indicating that retail prices still have room to rise further.
Gulf Oil analyst Tom Kloza warned that &#34;what has happened in the past 72 hours is highly inflationary,&#34; and predicted that gasoline prices will rise to between $3.25 and $3.50 per gallon by Easter Sunday.
Diane Swonk, KPMG's chief economist in the U.S., stated bluntly, &#34;With inflation having exceeded the Federal Reserve's 2% target for five consecutive years, adding new price pressures at this time is concerning,&#34; and explicitly mentioned that the risk of stagflation &#34;is not impossible.&#34;
Moreover, analysts pointed out that the impact of rising oil prices has extended to monetary policy. As oil prices climb, inflationary pressures intensify, potentially disrupting the Federal Reserve's path to interest rate cuts.
<h2>Inflationary Political Pressure Intensifies, Trump's Promises Face Test</h2>
The immediate trigger for this round of gasoline price increases is the military strikes launched by the U.S. and Israel against Iran and Tehran's subsequent retaliatory actions, which have raised expectations of global oil supply disruptions.
Tom Kloza further noted that if the conflict spreads to oil infrastructure in Saudi Arabia, Kuwait, and other areas, &#34;it will introduce variables that have never been seen before,&#34; implying that the tail risks of the current situation extend far beyond Iran itself.
Currently, gasoline prices in the U.S. are significantly varied—from $2.624 per gallon in Oklahoma to $4.674 in California. Although overall prices are still far below the historical peak of over $5 following the outbreak of the Russia-Ukraine conflict in 2022, the rapid upward trend itself is enough to alert the market.
Gasoline prices are one of the most direct indicators of inflation perceived by the American public, and their rise poses a direct challenge to Trump's political situation.
Currently, Trump is trying to prove to voters that he has the ability to tame inflation—this is precisely the core issue that has pressured his approval ratings, and there are only a few months left until the midterm elections that will determine whether the Republican Party can maintain control of both the House and Senate.
Ed Morse, a senior advisor at Hartree Partners, pointed out that &#34;40% of the economy consists of those who live paycheck to paycheck without savings,&#34; and once oil prices rise to $3.50 to $4 per gallon, &#34;it will inevitably impact a large population.&#34;
White House Press Secretary Karoline Leavitt responded that government policies have driven U.S. oil production to historic highs and stated that the Department of Energy and the Department of Treasury &#34;will continue to monitor oil price trends and do everything possible to maintain price stability.&#34;
However, data from the U.S. Energy Information Administration (EIA) shows that while U.S. oil production has recently increased slightly, it is expected to decline by 2026.
<h2>Energy producers benefit, but the wealth effect is hard to spread</h2>
Some analysts point out that rising oil prices are not entirely negative for the U.S. economy— as one of the world's largest energy exporters, U.S. energy producers will directly benefit from price increases.
Jeff Currie, Chief Energy Strategist at Carlyle Group, stated, &#34;The U.S. export volume is roughly comparable to that of Saudi Arabia; wouldn't you want oil prices to go up? In the short term, consumers in Chicago will be hurt, but once Texas energy producers get rich, they will also spend.&#34;
However, the energy crisis triggered by the Russia-Ukraine conflict in 2022 has provided a counterexample. According to a study published in September 2025, over 50% of the excess profits from soaring energy prices at that time ultimately flowed to the wealthiest 1% of Americans.
Gregor Semieniuk, a professor at the University of Massachusetts and one of the authors of the study, pointed out, &#34;Wealth distribution does not change overnight,&#34; and shareholders of large U.S. oil companies will once again be in the most advantageous position to benefit, while ordinary families will bear the brunt of price pressures.
<h2>Interest rate expectations under pressure, rate cut path may be disrupted</h2>
The impact of rising oil prices has extended to monetary policy.
CME data shows that compared to before the U.S. attack on Iran, market expectations for more than two 25 basis point rate cuts in the federal funds rate (currently in the range of 3.5% to 3.75%) within the year have significantly cooled.
Diane Swonk pointed out that with high oil prices coming in, the tariff effects and the stickiness of service sector inflation have not yet dissipated, and the multiple pressures have further narrowed the Federal Reserve's policy space.
Analysts indicate that if the conflict lasts longer than the four to five weeks expected by Trump, high oil prices will directly obstruct his political calculations for seeking rate cuts before the midterm elections.
Reports indicate that Trump will meet with Treasury Secretary Yellen and Energy Secretary Granholm later on Tuesday to discuss response strategies.
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U.S. gasoline prices surged due to military actions against Iran, reaching a national average of $3.109 per gallon on Tuesday, a significant increase from a week ago. Analysts warn that rising oil prices could exacerbate inflationary pressures, impacting the Federal Reserve's interest rate cut path. This round of price increases stems from the U.S.-Israel joint military strikes against Iran, intensifying market expectations of disruptions in global crude oil supply. The rapid rise in gasoline prices poses a challenge to Trump's political commitments, especially with the midterm elections approaching

- Rising oil prices in the U.S., driven by military actions against Iran, are impacting American households directly through gasoline prices, now averaging $3.109 per gallon.  
- The situation poses a challenge to Trump’s political commitments on inflation control, with warnings of potential stagflation risks as price pressures loom.  
- Analysts suggest that sustained high oil prices could disrupt Federal Reserve rate-cutting plans ahead of the midterm elections and exacerbate economic inequalities, benefiting energy producers disproportionately.

U.S. gasoline prices soar as Trump's "Iran gamble" begins to pay the price