Iran Attacks Raise Uncertainty Around US Economy

Conflict could impact inflation, growth, and public sentiment on economy

Published on Mar. 3, 2026

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The U.S. and Israeli attacks on Iran have added more uncertainty to a U.S. economy already facing challenges like on-and-off tariffs, weak hiring, and lingering inflationary pressures. The war has already raised oil prices, which could lead to higher gas and energy costs for consumers. Economists warn that a prolonged conflict that disrupts oil supply could worsen inflation and slow economic growth, potentially undermining public confidence in the economy and President Trump's leadership.

Why it matters

The U.S. economy has been grappling with affordability concerns and high inflation for nearly five years, which has eroded public confidence and support for President Trump. A protracted conflict with Iran that drives up energy and consumer prices could exacerbate these economic challenges, posing political risks for the administration.

The details

The price of U.S. benchmark crude oil rose 6.3% on Monday to $71.23 per barrel, while the international Brent crude standard climbed 6.7% to $77.74. While these increases are relatively modest so far, economists warn that a longer conflict that disrupts oil supply through the Strait of Hormuz could push prices past $100 per barrel. This would significantly accelerate inflation, with gas prices potentially reaching $3.50 per gallon nationwide. Higher energy and transportation costs would also ripple through the economy, impacting everything from airfares to grocery prices.

  • Oil prices rose sharply on Monday, March 3, 2026.

The players

Joe Brusuelas

An economist at the consulting firm RSM.

Alex Jacquez

Chief of policy and advocacy at the Groundwork Collaborative and an economic adviser to the Biden White House.

Rory Johnston

Founder of Commodity Context, an oil analytics firm.

Kathy Bostjancic

Chief economist at Nationwide Financial.

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What they’re saying

“While cost-conscious Americans who are dealing with an affordability crisis will not take this increase lightly, such an increase will not materially affect economic growth.”

— Joe Brusuelas, Economist (wbal.com)

“Markets are right now really under-pricing the tail risk of a sustained engagement and an operation that does not wrap up quickly, restore travel through the Strait of Hormuz and get everything back to de-escalation and normal in a timely manner.”

— Alex Jacquez, Chief of policy and advocacy, Groundwork Collaborative; economic adviser to Biden White House (wbal.com)

“This is a very minor spike relative to what happened after Russia's invasion.”

— Rory Johnston, Founder, Commodity Context (wbal.com)

“When there is an injection of new uncertainty into the business environment … that's a hit to confidence.”

— Kathy Bostjancic, Chief economist, Nationwide Financial (wbal.com)

What’s next

The ultimate impact of the Iran conflict on the U.S. economy will depend on its length and severity. If the war is short-lived, the economic effects would be minor and temporary. However, a prolonged conflict that disrupts oil supply could significantly worsen inflation and slow economic growth, posing political risks for the Trump administration.

The takeaway

The Iran attacks have added another layer of uncertainty to a U.S. economy already grappling with affordability concerns and high inflation. While the immediate impact may be modest, a protracted conflict that drives up energy and consumer prices could undermine public confidence in the economy and President Trump's leadership.