Consumers are beginning to face the economic impacts of the U.S.-Iran war. They now expect year-ahead inflation of 3.4%, up from 3.0% in February, according to the Federal Reserve Bank of New York’s Survey of Consumer Expectations released on Tuesday. In addition, the median year-ahead gas price change expectation was 9.4%, registering the highest level since March 2022.
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Trade QQQ with leverageLast week, the average price for a gallon of gas surpassed $4 for the first time since 2022, when Russia invaded Ukraine.
Gas Prices Soar as Trump Sends Fatal Warning to Iran
Since the beginning of the war on February 28, gas has increased to $4.14 from $2.98, or a 39% jump. This has contributed to higher inflation expectations and has also impacted perceptions of financial stability. Expectations for households’ financial situations over the next year have declined, with the share of households anticipating a worse situation reaching its highest level since April 2025.
The closure of the Strait of Hormuz has driven gas prices higher. The passageway accounts for 20% of global oil flows and has operated at a near standstill for over a month amid threats from Iran. Earlier today, President Trump warned that Iran’s “whole civilization will die” if the country refuses to open Hormuz by 8 p.m. Eastern Time today.