New Evidence Shows US-Iran War Truly "Backfiring" on America Itself
New Evidence Shows US-Iran War Truly “Backfiring” on America Itself
Jakarta, CNBC Indonesia - US consumer inflation soared to its highest level in three years in April 2026, amid the economic fallout from the ongoing Iran conflict shaking global energy markets.
The latest data from the US Bureau of Labor Statistics indicates that the Consumer Price Index (CPI) rose 3.8% year-on-year in April. This figure marks an increase from March’s inflation rate of 3.3%. The inflation surge was primarily triggered by a sharp rise in energy prices following the worsening tensions in the Middle East due to the conflict involving the US, Israel, and Iran.
Iran’s retaliatory strikes against Washington’s regional allies are said to have disrupted global energy distribution routes, including the Strait of Hormuz. For context, around 20% of the world’s oil and natural gas supplies pass through the Strait of Hormuz under normal conditions.
Disruptions in this strategic route have propelled global energy prices to skyrocket in recent weeks. BLS data shows that the US energy price index rose 17.9% in April compared to the same period last year. This represents the highest increase among all consumer spending categories.
Not only energy, but food prices also saw a significant rise. Food inflation was recorded at 3.2% year-on-year in April, while prices for staple groceries experienced the fastest increase since 2023.
On the other hand, core CPI inflation climbed to 2.8% in April from 2.6% in March. Core inflation in the US excludes the volatile food and energy components.
In fact, since taking office, US President Donald Trump has promised to reduce inflation. Inflation will also pose a major issue for the Republican Party in the November midterm elections.
“Consumers are not only facing a major shock at the petrol station, but also their electricity bills, as electricity prices rose sharply last month,” said Bernard Yaros, chief US economist at Oxford Economics, warning that high petrol prices indicate that pump prices will likely push inflation higher next month, as reported by AFP.
“Donald Trump promised to lower costs ‘on day one’. Instead, he keeps raising them (inflation). First, his chaotic tariffs drove prices higher. Now, his war with Iran is pushing them even further,” Democrat Senator Elizabeth Warren criticised Trump.
Meanwhile, this inflation rise could complicate the Federal Reserve’s steps in determining the future direction of interest rate policy. This is because price pressures from energy are seen as potentially slowing the US central bank’s efforts to bring inflation back to its long-term target.
“Given that inflation is moving in the wrong direction and the labour market remains resilient, it is highly unlikely that the Fed will be able to cut interest rates in the near term,” said analyst Chris Zaccarelli from Northlight Asset Management.