US Inflation Hits Three-Year High Amid Middle East War
US inflation is at a three-year high, driven in part by the Middle East war's impact on fuel supplies. US President Donald Trump says he is pleased with the situation, and that it is only temporary. But fresh strikes between the US and Iran mean there is no end in sight to disruptions of key supplies of oil, gas and fertilizer.
US Inflation Hits Three-Year High Amid Middle East Conflict
REPORTER:
A busy day at a gas station in Jackson, Mississippi. But for the customers pulling in today, money is tight. War in the Middle East has driven up gas prices—and that’s pushed inflation in the US to its highest level in three years.
David Johnson (MOTORIST):
Some places it's still $4 a gallon for gasoline. And then diesel, don't get me started on that. It's just - it's insane.
Matt Goar (MOTORIST):
Yeah everything is a lot higher. I know when me and my wife first got married, I could just — like groceries for instance — I could go to Walmart and fill up a whole buggy for maybe $200. Now $200 won't even get you half a buggy.
REPORTER:
In Washington, US President Trump says this is a temporary setback—and that prices will go down once the war ends. Despite running on promises to curb inflation, he is embracing the situation.
Donald Trump (US PRESIDENT):
No, I love it. The numbers were great.
REPORTER:
But the war doesn’t show signs of stopping. On Wednesday, US Defense Secretary Pete Hegseth announced fresh strikes on Iran—now reportedly finished.
Pete Hegseth (US DEFENSE SECRETARY):
CENTCOM, Central Command will be busy tonight because President Trump said we will be hitting Iran hard, and we will be, because Iran has a chance to make a good deal, a great deal to codify what they said they've been willing to do, and they haven't been willing to do it.
REPORTER:
Iran’s state TV has reported explosions, bringing an Iranian response. Iran says it hit two ships in the Strait of Hormuz—a key gateway for oil, gas and fertilizer that’s become a linchpin of this war.
REPORTER:
The US says its warships are all safe—and disputes Iran’s statement that the strait is shut to traffic.
REPORTER:
Still, tanker traffic is stuck in place—and there’s a chance of a possible further oil price shock in the coming weeks.
Stephen Kates (BANKRATE FINANCIAL ANALYST):
When people expect inflation to be high, prices to continue to rise, or even rise more rapidly, they behave differently than when they expect stable prices, and it's the expectation of rising prices that can make people go out and buy quickly or sooner, not put off big purchases. And that makes inflation worse.
REPORTER:
And that could hurt Trump’s Republican Party in midterm elections now less than five months away, because even if the US and Iran reach a deal soon, supplies could still take months to return to normal.
