President Donald Trump continues to send mixed messages about how long the Iran War will last, hinting that it could end soon while also suggesting it could go on “indefinitely” if needed.
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No matter when it ends, the financial fallout is likely to continue. Here are four ways your wallet could still feel the pinch.
High Oil and Gas Prices
Maybe the biggest immediate impact of the war is its effect on oil and gas prices. The average price of a gallon of regular gasoline reached $3.84 a gallon as of March 18, according to AAA. That’s up from $3.08 a year ago and $2.92 as recently as a month ago.
“While we have not yet reached crisis level, should this matter not be resolved by consensus projections, energy prices could reach 2022 Russia-Ukraine levels,” Kenny Zhu, research analyst at Global X ETFs, wrote in an email shared with GOBankingRates.
Even after the war ends, it could take years to rebuild damaged oil infrastructure in the Middle East, which could have a lingering impact on oil, gas and energy prices.
Check Out: 4 Grocery Items That Have Gotten Much More Expensive Since Trump Took Office
Interest Rates
The combination of rising oil prices, overall inflation fears and the expensive war effort could lead the Federal Reserve to delay or forgo interest rate cuts. This could pinch your wallet in numerous ways, from higher mortgage rates and sluggish stock growth to economic risks that could threaten jobs.
“Conflict-driven inflation risks could force policymakers to reassess their outlook for 2026, especially as markets rapidly dial back expectations for interest rate cuts,” Lukman Otunuga, senior market analyst at FXTM, wrote in a note shared with GOBankingRates. “Traders should brace for heightened volatility across equities, commodities and currencies.”
AI Investments
One of the main drivers of stock market gains over the past couple of years has been the artificial intelligence (AI) boom. AI investments reportedly have accounted for roughly half of U.S. economic growth in recent quarters, according to a recent blog from Desmond Lachman, senior fellow at the American Enterprise Institute.
But the war could slow that momentum and cut into wealth gains for AI investors.
“Higher energy prices could now constitute a headwind to that boom, considering how energy-intensive the AI revolution is,” Lachman explained.
Travel and Hospitality
A shutdown in Middle East travel has contributed to sell-offs in the shares of airline stocks, cruise ship operators and hotel/lodging companies. The region’s travel industry isn’t likely to bounce back quickly no matter when the war ends, which could mean lower returns for investors in travel and hospitality stocks.
Meanwhile, airlines could continue to face higher fuel prices, potentially leading to pricier airfares and lower returns on airline stocks.
“Most airlines hedge fuel exposure only partially, leaving earnings at risk from each price spike,” said Chad Cummings, an attorney and CPA at Cummings & Cummings Law who previously worked in finance and tax. “War-zone route cancellations and the closure of Gulf airspace compound revenue loss.”
Editor’s note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
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This article originally appeared on GOBankingRates.com: Trump Says the Iran War Could End Soon: How Your Wallet Could Still Feel the Pinch After It’s Over
