Rising U.S. fuel prices risk political headache for Trump

Americans are feeling the sting of rising gasoline prices, a surge sparked by the U.S.-Israel war on Iran and Tehran’s effective blockade of the Strait of Hormuz. The jump comes as President Donald Trump faces a politically sensitive moment ahead of midterm elections.

Sean Robinson, a 54-year-old schoolteacher in Washington, noticed the sharp rise at the pump Friday.

"That is a sizeable jump," he told AFP, pointing to a neon sign showing $3.27 for a gallon of regular gasoline.

Robinson said the increase will force him to cut back on all but essentials. "It just determines what I'm going to do on a day-to-day basis," he said. "Pretty much start thinking about (watching) Netflix, staying in the house instead of burning gas."

Toloria Washington, 39, who works in finance, agreed: "It impacts all areas of life. We are in a state of survival mode." She said fuel expenses are non-negotiable and rising prices force cuts elsewhere. "That's the key thing, it's tapping into everybody's basics," she added. "It's the basics. Daily survival of food, water, housing."

U.S. inflation hit a pandemic peak of 9.1 percent. While it has cooled, analysts warn rising fuel costs could reignite price pressures.

"Inflation showed signs of accelerating prior to the jump in energy prices," said KPMG chief economist Diane Swonk. "That has left consumers in a sour mood." She added that rising fuel prices deliver "insult to injury" for low-income Americans already facing higher healthcare costs and tighter welfare benefits.

Trump, who has touted falling oil prices during his previous term, sought to calm fears Friday, telling CNN he expected prices to drop quickly. His Republican Party holds slim majorities in both the House and Senate, and the midterms loom in November.

Rising gasoline prices also complicate the Federal Reserve’s dual mandate of stable prices and maximum employment. Higher inflation could push the Fed to maintain elevated interest rates, cooling economic activity.

"This could not come at a worse time for the Federal Reserve," Swonk said. "It now has a dueling mandate with the risk that inflation not only lingers but accelerates."

Fed Governor Christopher Waller told Bloomberg TV Friday that higher energy prices are "unlikely to cause sustained inflation."

But for Americans at the pump, temporary price spikes feel significant. "One thing after another, it's chaos, you know, every day," said Lucas Tamaren, 32, in Los Angeles. "Living in America feels unpredictable and chaotic and it's hard."

Robinson said he will be watching gas prices daily and expects household pressures to influence voters in November. "The more you pay higher gas, higher groceries (costs)," he said, voters will "start to see" that the middle class is shrinking.