{"id":110965,"date":"2026-05-12T23:12:12","date_gmt":"2026-05-12T23:12:12","guid":{"rendered":"https:\/\/www.europesays.com\/iran\/110965\/"},"modified":"2026-05-12T23:12:12","modified_gmt":"2026-05-12T23:12:12","slug":"how-the-iran-war-fueled-april-inflation-numbers","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/iran\/110965\/","title":{"rendered":"How the Iran war fueled April inflation numbers"},"content":{"rendered":"

The consumer price index out Tuesday<\/a> shows inflation rose 0.6% in April and 3.8% year-over-year. It\u2019s far cry from the Federal Reserve\u2019s target of 2%. Much of that increase \u2014 about 40% \u2014 is because of rising energy prices.<\/p>\n

There\u2019s a term economists use to describe a singular and short-lived shock to prices. Maybe one you\u2019ve heard before. One that Sean Snaith, director of the Institute for Economic Forecasting at the University of Central Florida, would use to describe the U.S. war with Iran.<\/p>\n

\u201cThat is potentially as close to transitory as you can get,\u201d he said.<\/p>\n

He said the spike we\u2019re seeing in energy prices is in theory just a blip, because the war could be resolved tomorrow. But also, maybe not.<\/p>\n

\u201cIf this continues through the summer and into the fall then we start to see more downstream effects of higher oil and natural gas prices,\u201d he said.<\/p>\n

At some point, businesses will have to charge more. Gary Schlossberg, global strategist at Wells Fargo Investment Institute, said that will make inflation harder to tame.<\/p>\n

\u201cEven if and when the trade routes are reopened, when supply chains normalize, inflation will come down, but it could be more gradual than it might have been a few years ago,\u201d he said.<\/p>\n

More gradual than a few years ago because the war comes after a bunch of other economic shocks.<\/p>\n

There\u2019ve been tariffs, which some economists say caused transitory inflation. There was the pandemic, which the Fed famously said caused transitory inflation<\/a>. How many consecutive transitory inflation events have to happen before it becomes one big pot of persistent inflation soup?<\/p>\n

\u201cThat\u2019s also a million-dollar question that macroeconomists would like to answer,\u201d said Julie Smith<\/a>, an economics professor at Lafayette College. <\/p>\n

She said Americans have lived through a five-year period of big increases to the cost of necessities \u2014 housing, food, gas. They feel it and they\u2019ve come to expect it.<\/p>\n

\u201cI don\u2019t know if that just goes away if, you know, gas comes down,\u201d Smith said.<\/p>\n

Consumers might assume rising inflation is now a way of life. It\u2019s a dangerous mindset because those consumers\u2019 expectations can help drive actual inflation<\/a>. <\/p>\n

Related Topics<\/p>\n","protected":false},"excerpt":{"rendered":"The consumer price index out Tuesday shows inflation rose 0.6% in April and 3.8% year-over-year. It\u2019s far cry…\n","protected":false},"author":2,"featured_media":110966,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[23242,375,1004,34,38288],"class_list":{"0":"post-110965","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-iran","8":"tag-consumer-price-index","9":"tag-energy-prices","10":"tag-inflation","11":"tag-iran","12":"tag-transitory-inflation"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@iran\/116564141155657647","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/posts\/110965","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/comments?post=110965"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/posts\/110965\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/media\/110966"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/media?parent=110965"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/categories?post=110965"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/tags?post=110965"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}