For
Trump, Soaring Prices Test Voters’ Finances and Patience
Just
months before another election that may hinge on the economy, the war in Iran
has sent gas and other goods soaring.
“I don’t
think about Americans’ financial situation,” President Trump said recently when
asked if economic pain was motivating him to make a deal with Iran.
Tony Romm Ben Casselman
By Tony
Romm and Ben Casselman
Tony Romm
reported from Washington and Ben Casselman from New York.
May 17,
2026, 5:02 a.m. ET
Swept
into power by voters who were frustrated with the nation’s economic trajectory,
President Trump promised at his inauguration to “bring prices down.”
But that
was January 2025, more than a year before the White House would forge ahead
with an agenda that has sent inflation roaring back, testing the patience — and
the finances — of a cost-wary American electorate once again.
For Mr.
Trump, the nation’s political and economic strains are laid bare in a series of
dour reports released over the past two weeks. Consumer prices last month rose
at their fastest clip in about three years, outpacing workers’ wages, while
businesses saw their costs increase at a rate not seen since 2022.
Americans
are racking up more debt. Families are saving less. And a key measure of
consumer confidence dipped to an all-time low this month. The anxiety has bled
into recent political polls, which have registered broad public disapproval of
Mr. Trump’s handling of the economy.
At the
heart of matter is the war with Iran, which sent the average gallon of gasoline
to about $4.52 nationally, according to AAA. That is a more than 40 percent
jump from a year ago, an uptick that has cut across the global economy,
affecting everything from the cost of workers’ daily commutes to the prices of
goods at grocery stores.
Yet the
president has largely dismissed those recent signals, telling reporters at one
point last week: “I don’t think about Americans’ financial situation.”
Mr. Trump
had been asked about the extent to which the economy factored into his plans to
end the war, and responded that disarmament was his sole concern. Otherwise,
the president has maintained that the U.S. economy is strong and will rebound
quickly once the war concludes, precipitating a rapid fall in gas prices in the
United States.
Stephen
Moore, a conservative economist who has advised Mr. Trump, said the recent
turbulence was not a “surprise.” But he acknowledged that voters might not be
forgiving come November’s midterm election, given that the president promised
he would bring down the cost of living.
“Republicans
could face a tsunami election in November if inflation continues to stay high,”
said Mr. Moore, who described gas prices as “the chief gauge people use to
determine how the economy is doing.”
The jump
in fuel costs is only the latest blow for American families, who have suffered
through years of rising prices, high interest rates and a softening labor
market — as well as much longer-running concerns about the affordability of
housing, child care and other essentials.
Add on
mounting concerns that the arrival of artificial intelligence could yield mass
job losses and Americans have plenty of reason to be worried about their
financial well-being, said David Tinsley, an economist at the Bank of America
Institute.
“It’s one
thing after another, and I think that is why people feel so bad,” he said.
“It’s quite hard to point to things that people would feel great about, that
would inspire a lot of optimism, unless you’re at the top of the income
distribution.”
At the
start of the year, Mr. Trump seemed ready to hit the 2026 campaign trail and
claim credit for an economy on the upswing. In some of its earliest forecasts,
the White House believed that its agenda, particularly its recent round of
expensive tax cuts, would seed the conditions for higher wages, more jobs and
new investments over the coming year, yielding benefits that voters would
remember once they arrived at the ballot box.
But then
Mr. Trump began to bomb Iran in February, which upended the global economy by
snarling its energy supply. Far from the boom once envisioned, analysts have
since broadly revised their projections, anticipating that sky-high oil will
slow growth, worsen unemployment and raise prices, meting out the greatest
damage to families that earn the least.
“These
are the exact kind of spikes that are going to hit low-income people the
hardest, at the exact same time that their incomes are slowing the most,” said
Alex Jacquez, chief of policy and advocacy for the Groundwork Collaborative, a
progressive group that focuses on cost-of-living issues. “I totally understand
why people are really mad right now.”
Mr.
Jacquez served under President Joseph R. Biden Jr., who strained early in the
2024 election to convince Americans that the economy was good when their gas
and grocery bills said otherwise. Stung by the downturn of the Covid-19
pandemic, voters did not accept that argument, and they returned Mr. Trump to
office.
During
the presidential race, Mr. Trump promised to bring down inflation and restore a
sense of normalcy after years of economic tumult. Once elected, however, he
began unleashing chaos of his own making, chiefly through his eye-watering
tariffs, which caused import prices to rise. And just as those effects had
started to calm, the president commenced a war that drove up the cost of gas,
the one product where the price is posted in giant numbers alongside every
highway in America.
“They’re
the two major decision points of his presidency, and their impact on domestic
prices is to unequivocally make them higher,” Mr. Jacquez said.
Despite
the mounting challenges, the White House has remained bullish about the
nation’s economic course. Last Sunday, Kevin Hassett, the director of the White
House National Economic Council, mused on Fox News that the nation’s gross
domestic product, a measure of its output, could top 6 percent this year. (Most
private forecasters expect the economy to grow at less than half that rate.)
Mr. Trump
and his aides have also pointed repeatedly to the stock market, which has
posted a series of record trading days during the war, primarily driven by
optimism around artificial intelligence. So, too, has the White House found
reason for celebration in the labor market, after employers added 115,000 jobs
last month, surpassing expectations.
Pierre
Yared, the acting chairman of the White House Council of Economic Advisers,
predicted last week that consumer prices would “go back down” once the war
ended. That, he added, would relax pressure on families, who would see wages
continue to grow “following the tailwinds of the economy.”
“Consumers
are continuing to spend, and they do seem to be looking through the shock,” Mr.
Yared said. “It looks to us like consumers understand the situation is
temporary.”
There is
little evidence so far that Americans’ anxiety about the economy is causing
them to pull back their spending. Retail sales were solid in April, data
released on Thursday showed, continuing a pattern of resilience that has
repeatedly defied forecasters’ predictions of a slowdown.
But that
strength is being driven, at least partly, by wealthy households, which have
been insulated from economic headwinds by a steadily rising stock market.
Lower- and middle-income households are the ones bearing the brunt of slower
wage growth and rising prices. Larger tax refunds have helped many families
offset higher costs, but that effect is fading.
“There is
a bit of a buffer from increased tax returns,” said Justin Weidner, an
economist at Deutsche Bank. “The consumer has a bit of a buffer in the near
term, but the longer gas prices remain high, the more precarious the situation
could get.”
Taken
together, the conditions have left investors convinced that the Federal Reserve
is not going to slash interest rates this year, as Mr. Trump has vigorously
sought. Even after securing a new chair for the central bank — Kevin M. Warsh,
who was confirmed by the Senate on Wednesday — policymakers seem inclined to
wait out the current uncertainty before resuming their cuts.
“We think
there is a narrow path to being able to get a cut in, but I would say it is
very slim,” said Josh Hirt, a senior economist at Vanguard, adding that it
“would definitely depend” on a swift unwinding of the war with Iran.
Yet the
president’s aides have appeared to dismiss investors’ conclusions about the
Fed. In an interview on the sidelines of trade talks in China, Scott Bessent,
the Treasury secretary, told CNBC that inflation would moderate quickly,
allowing Mr. Warsh to cut rates soon.
“I
actually think he’s going to be in a very good position,” the secretary said of
Mr. Warsh, “because we may get a series, one or two more hot inflation numbers,
but then I think we’re going to see substantial disinflation.”
Michael
Strain, an economist at the conservative American Enterprise Institute, said
Mr. Trump’s approach to the economy had been baffling, especially coming off
the experience of the Biden administration.
“I’ve
been struck, even before the Iran war, with the degree to which President Trump
is making the same mistakes as President Biden,” Mr. Strain said. “We’ve had
two presidents in a row who have seen consumer prices going up on their watch,
who have dismissed those price increases out of hand as temporary, transitory,
not real in some measure.”
Both
presidents had also “politically chosen to downplay the importance of price
increases in the lives of voters,” Mr. Strain added.
“There
have been an astonishing number of own goals in the last year and a half,” he
said.
Tony Romm
is a reporter covering economic policy and the Trump administration for The
Times, based in Washington.
Ben
Casselman is the chief economcs correspondent for The Times. He has reported on
the economy for nearly 20 years.
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