President Donald Trump said Monday that once the war with Iran is over, gas and oil prices will “drop like a rock.”
Many economists disagree. The profession even has a phrase for what happens to prices during a global conflict or supply shock: “rockets and feathers.” As in, prices shoot up like a rocket, but they slowly fall back like a feather.
This is not the first time Trump has run afoul of basic tenets of economics. Since returning to the White House, he has regularly given explanations, made predictions and taken actions that would lead to a failing grade in an Economics 101 course.
While campaigning in 2024, he promised to “bring prices down, starting on Day 1,” a pledge that economists dismissed as fundamentally impossible. Once in office, he implemented broad tariffs, insisting that they would be funded by foreign countries despite repeated warnings that the costs would be passed on to consumers. Then his war with Iran prompted the closure of the Strait of Hormuz, which triggered a surge in oil prices, fractured global supply chains and created severe fertilizer shortages — the exact catastrophic consequences that economists had long predicted.
There is broad agreement on how inflation, tariffs and the global supply chain work.
None of these are partisan issues. While economists who advise Republicans might disagree with those who counsel Democrats on the virtues of tax cuts or deregulation, there is broad agreement on how inflation, tariffs and the global supply chain work. In fact, a 2006 survey showed there is a strong consensus among economists on a wide range of subjects, from why gas taxes are good to why agricultural subsidies are bad — two more areas where Trump has run afoul of their recommendations.
The irony is that Trump has an undergraduate degree in economics from the Wharton School at the University of Pennsylvania, which is widely regarded as one of the most prestigious business schools in the world.
Trump’s economic decisions have created political problems, too. Congressional Republicans are heading into the midterm elections facing a ticking time bomb, as the economic shock of the Iran war will likely be felt even more seriously this fall. Voters will not immediately feel inflation spikes, higher interest rates or geopolitical disruptions. Instead, the impact will build over time through higher prices, weaker confidence, slower hiring, reduced investment and declining purchasing power.
The U.S. economy was already under strain before renewed tensions involving Iran raised fears of broader conflict. Interest rates remain high after years of Federal Reserve tightening to curb inflation, and growth has slowed from its post-pandemic rebound. Americans still face elevated costs for groceries, housing, insurance and energy. Although inflation has eased from its peak, prices remain well above pre-pandemic levels, leaving many households under sustained financial pressure.
Higher gas prices helped drive inflation to 3.8% in April, but economists have warned that higher gas prices will raise the costs of manufacturing and transportation, which will lead to higher consumer costs down the road.
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The current economic environment makes those concerns more serious. Inflation is already psychologically embedded for many Americans. Consumers expect prices to remain high because they have experienced years of instability. Once those expectations take hold, inflation can become self-reinforcing as businesses raise prices preemptively and workers demand higher wages to compensate for anticipated future costs. That dynamic is exactly why economists have warned against overly aggressive rate cuts during uncertain periods — the exact thing that Trump has pushed the Federal Reserve to do.
Trump’s statement that inflation will decline “as soon as the Iran war is over” also overlooks how inflation actually works. Even if oil prices were to fall after tensions ease, businesses often do not quickly roll back prices once they have risen. Supply chains take time to normalize, employers remain cautious about hiring after periods of uncertainty and households facing depleted savings or higher debt do not immediately resume prior spending levels. As a result, economic effects tend to linger long after the initial shock fades from headlines.
Public sentiment reflects this strain. A CNN poll conducted by SSRS found that 77% of Americans, including a majority of Republicans, believe Trump’s policies have increased the cost of living in their communities. Roughly two-thirds said his policies have worsened economic conditions nationwide, and his approval rating on the economy stands at 30%, a career low.
Congressional Republicans could face consequences as well. Most Republican lawmakers have closely aligned themselves with Trump’s economic messaging, leaving little distance between his political brand and the party’s broader identity. If voters believe inflation remains too high in November, Republicans up and down the ballot may face the backlash.
Economics 101 teaches that there is often a lag between a decision or event and its economic effects. Politics works the same way. It’s possible that Trump has already made the decisions that will most affect Republicans’ chances this fall.
This is a preview of MS NOW’s Project 47 Newsletter. As President Trump continues implementing his ambitious agenda, get expert analysis on the administration’s latest actions and how others are pushing back sent straight to your inbox every Tuesday. Sign up now.
Lily Becker is a producer on “The Weeknight” for MS NOW.