A month after U.S. and Israeli forces launched a coordinated military campaign against Iran, designated Operation Epic Fury, American citizens are grappling with significant financial pressures. The operation, which began on February 28 with strikes on Iranian soil, has coincided with a convergence of economic challenges across energy, housing, and equity markets, with no clear end in sight.
The most immediate and visible impact has been on global energy markets, directly translating to higher costs at the pump for consumers. Before the military actions commenced, the American Automobile Association reported the national average for a gallon of regular gasoline at $2.98. Today, that same gallon costs $3.98, according to data from Axios, representing a dollar increase extracted from drivers' pockets over a single month. This surge is largely attributed to disruptions in one of the world's most critical maritime choke points.
Prior to Operation Epic Fury, approximately one in every five barrels of oil consumed globally transited through the Strait of Hormuz, a narrow waterway situated between Iran and the Arabian Peninsula. Following the initiation of strikes, the flow of tankers through this strategic corridor dropped to nearly nothing. This sudden disruption led to a dramatic tightening of oil markets, pushing crude prices sharply past $100 per barrel as buyers scrambled for alternative supplies. The significant increase in crude oil prices at the wellhead has directly translated into the higher gasoline costs now borne by American motorists.
Beyond the gas station, the housing market is also experiencing considerable turbulence. The Wall Street Journal reported on Thursday that the average rate for a 30-year fixed mortgage has climbed to 6.38%. This level has not been observed since September 2025. Just two days before the military operation began, the benchmark rate stood at 5.98%. Four consecutive weeks of increases have added hundreds of dollars annually to the cost of securing a new home loan, impacting affordability for prospective homeowners.
Wall Street has not been immune to the economic shocks. Since February 28, combined losses across all U.S. equity markets have exceeded $3 trillion in market capitalization, marking a decline of more than 7% from January totals, according to Axios. Specifically, the S&P 500 has fallen by 7.4%, the Dow Jones Industrial Average has retreated by 7.8%, and the Nasdaq Composite has shed 7.6% over the four-week period.
In response to these developments, analysts closely monitoring the Federal Reserve have largely concluded that previously anticipated rate cuts are now firmly off the table for the foreseeable future. The oil price shock alone is seen as providing ample justification for the Fed to maintain current rates or even consider moving in the opposite direction. Futures market data from Friday delivered a striking signal, with CNBC reporting that traders now place the odds of an actual rate increase before the close of 2026 at 52%. This marks the first time that the prospect of a rate hike, rather than a cut, has crossed the threshold from unlikely to more probable than not.
Amidst this challenging economic backdrop, the Trump administration has sought to frame the financial discomfort as a necessary and worthwhile investment in national security. Treasury Secretary Scott Bessent articulated this message on NBC’s “Meet the Press” on March 22, defending the administration’s strategic calculus to host Kristen Welker. Bessent drew a direct correlation between short-term economic sacrifices and long-term national security objectives. He argued that "50 days of temporary elevated prices" represent a manageable cost when weighed against "50 years of not having an Iranian regime with a nuclear weapon." He further stated, "The American people are beginning to understand, thanks to President Trump, that there is no prosperity without security."
Democrats, meanwhile, have swiftly integrated the economic fallout into their midterm election strategy. The party had already achieved notable successes in 2025 state-level races by aggressively campaigning on affordability issues, even before Operation Epic Fury unfolded. The recent economic turbulence has provided them with fresh material to bolster their message. Tuesday's election results in Florida offered a tangible illustration of how this message is resonating with voters. State Representative Emily Gregory, a Democrat, secured a legislative seat that includes President Trump’s Mar-a-Lago estate, a district traditionally leaning heavily Republican. Speaking with CNN’s Erin Burnett after her victory, Gregory highlighted the pervasive impact of rising costs. "Everyone is feeling that affordability crisis, and the last thing that Florida families needed when they’re struggling is $4 gas," Gregory told Burnett.
With the November midterm elections seven months away, the intersection of wartime economics and electoral politics is intensifying. Candidates from both major parties are refining their arguments, while American voters continue to navigate the rising costs of daily life.
