{"id":505971,"date":"2026-03-05T21:55:08","date_gmt":"2026-03-05T21:55:08","guid":{"rendered":"https:\/\/www.newsbeep.com\/us\/505971\/"},"modified":"2026-03-05T21:55:08","modified_gmt":"2026-03-05T21:55:08","slug":"trumps-war-carries-economic-risk","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us\/505971\/","title":{"rendered":"Trump\u2019s war carries economic risk"},"content":{"rendered":"

President Trump, however, appears to be in no rush to end the fighting.<\/p>\n

The news: Asked Wednesday how long the US offensive would continue, Defense Secretary Pete Hegseth told reporters<\/a>, \u201cWe could say four weeks, but it could be six, it could be eight, it could be three.\u201d<\/p>\n

Now, with the war wrapping up its sixth day, hopes for a quick resolution are starting to fade.<\/p>\n

Iran has launched missiles or drones<\/a> at Israel and at least 11 other countries. These counterattacks have done limited damage. But the threat of Iranian attacks has effectively shut the Strait of Hormuz, a vital energy transport route. Just a few direct hits on key energy facilities could change the picture. <\/p>\n

Step back: Remarkably, financial markets have remained relatively calm.<\/p>\n

The increase in oil prices this week has been swift but not quite as severe feared. Stocks have barely moved. But investors are on tenterhooks. Their restraint will be tested the longer the war continues.<\/p>\n

The primary concern: Major energy supply disruptions could push prices sky high \u2014 curbing economic growth, especially in Europe and Asia, which are dependent on imports. <\/p>\n

In the US, a repeat of 1970s-like gas lines isn\u2019t in the cards now that the country is a net energy exporter. But oil prices are set in the global market, so the US isn\u2019t immune to sharp price hikes. A rapid run-up could boost inflation that\u2019s already running above the 2 percent rate targeted by the Federal Reserve. <\/p>\n

\u201cThe war has become a test of wills and stamina,\u201d Vali Nasr, of the Johns Hopkins School of Advanced International Studies in Washington, told The New York Times<\/a>. \u201cIran is facing qualitatively superior militaries, so the strategy is to test their will by expanding the battlefield, complicating the war and increasing the danger to the world economy.\u201d<\/p>\n

Why it matters: Remember all the flak former president Joe Biden took when gas hit $5 a gallon in the months after Russia\u2019s Ukraine invasion in 2022 \u2014 and inflation topped out at 9.1 percent?<\/p>\n

The price of regular gas in Massachusetts<\/a> climbed 20 cents a gallon to an average of $3.10 in the past week, according to AAA. Even so, the price is only about a dime more than a year ago.<\/p>\n

But if Iran managed to cause real damage to Gulf energy facilities, prices at the pump would march higher. Trump would come under intense pressure from the public \u2014 and Republicans facing reelection in November \u2014 after promising to ease inflation and eschew nation-building.<\/p>\n

To be sure, the Pentagon says Iran\u2019s military capabilities have been drastically degraded. But even a weakened Iran can threaten tankers and refineries.<\/p>\n

On the ground: According to Bloomberg, the flow of oil and gas from the Gulf is at a near-standstill, leaving producers to stockpile supplies and prepare to cut output. <\/p>\n

\u201cRecent developments increase the likelihood of abrupt shipping delays, rerouting along longer passages, and sudden price spikes \u2014 all of which could dampen global growth if tensions persist,\u201d EY-Parthenon chief economist Gregory Daco said in a note earlier this week.<\/p>\n

Two scenarios: Daco laid out the potential economic consequences of both a brief and protracted war. <\/p>\n

In the scenario where the fighting ends soon, Brent climbs about $20 a barrel to the $80 range before retreating. This pushes US inflation up by half a percentage point to 3.5 percent, before it falls back to 2.5 percent by year end. Economic growth is trimmed to 2.2 percent for the year from his current forecast of 2.4 percent.<\/p>\n

An extended war \u201cwould trigger intense financial stress and major fractures in global trade,\u201d Daco wrote, with Brent approaching $110 per barrel and remaining above $100 through year-end. Equity markets fall, the dollar rises, US inflation tops 4 percent, and the economy tips into a recession.<\/p>\n

Final thought: There\u2019s no good time to go to war.<\/p>\n

But Trump has focused abroad when there are plenty of issues at home that need to be addressed, starting with the high cost of living. <\/p>\n

Moreover, the economy is in a precarious position. Inflation is sticky, tariffs are a drag on growth, fiscal deficits are widening, and the stock market is, by some accounts, in an AI-inflated bubble. <\/p>\n

Now, Trump has added to the mix potential energy price spikes, trade flow interruptions, and global political turbulence.<\/p>\n

The president may think he has the luxury of time to deal with Iran. But a quick finish would be in the best interests of the country.<\/p>\n

Larry Edelman can be reached at larry.edelman@globe.com<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"President Trump, however, appears to be in no rush to end the fighting. The news: Asked Wednesday how…\n","protected":false},"author":2,"featured_media":505972,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[36],"tags":[28,101,4910],"class_list":{"0":"post-505971","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-economy","10":"tag-newsletter"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/505971","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=505971"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/505971\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/505972"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=505971"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=505971"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=505971"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}