Ceasefire Fails to Alleviate Economic Pressures: The Shadow of Inflation Will Persist in the US Economy After the War

The war with Iran may be nearing its end, but this does not mean that the pressures on the US economy will disappear. On the contrary, a series of issues surrounding high prices, inflation, and supply chain disruptions will continue to affect the lives of ordinary American families for a considerable period of time and will also become important topics in American politics.

At the beginning of the war, the Trump administration repeatedly emphasized that the military action against Iran would end quickly, that the impact on the US economy would be relatively limited, and that the US economy would recover rapidly after the conflict. However, reality has not entirely matched this expectation. The war has lasted for three months, and not only has it not ended as quickly as expected, but it has also had a significant impact on the US economy. Even the initial signs of a ceasefire or agreement have only temporarily de-escalated the conflict and have not fundamentally resolved the economic chain reaction caused by the war.

The most direct impact is reflected in energy prices. During the war, international oil prices rose significantly. Although they have recently fallen somewhat, domestic gasoline prices in the US remain at a high level. Data shows that the average gasoline price across the US is still above $4 per gallon, about $1 higher than a year ago. Experts point out that even after the war ends, oil prices will not immediately return to pre-war levels because the global energy market needs time to adjust, and there are lags in the recovery of transportation, storage, and supply chains. Therefore, ordinary consumers may need several more months before they feel a significant price drop at gas stations.

Besides energy prices, disruptions to the global supply chain are also a significant issue. During the war, shipping through the Strait of Hormuz, connecting the Persian Gulf and the Gulf of Oman, was affected, leading to disruptions in international trade, shipping backlogs, and shortages of some goods. Although shipping routes are gradually recovering, the backlog of goods and the affected logistics system will not return to normal quickly. For example, the supply of key commodities such as fertilizers remains tight, which not only affects agricultural production costs but may also further push up food prices, thus exacerbating inflationary pressures.

From an overall economic perspective, the United States experienced a significant acceleration in inflation during the war. The rate of price increases even exceeded wage growth, leading to a decline in residents' real purchasing power. Latest data shows that inflation has reached a three-year high. This situation means that even after the war ends, the rate of price decline may be very slow. Many economists predict that it may take until around 2027 for gasoline prices and overall inflation to return to pre-war levels, during which time American families will continue to face high living costs.

This economic pressure is gradually translating into political pressure. With the midterm elections approaching, more and more voters are dissatisfied with the government's economic performance, particularly expressing concern about rising prices and the cost of living. Opposition figures are using this opportunity to criticize government policies, arguing that the current economic difficulties are closely related to war decisions and have exacerbated the burden on ordinary families. The White House, however, emphasizes that the government has taken numerous measures to control costs and points out that job growth and some economic indicators remain positive, such as the continued substantial number of new jobs created.

However, economists hold differing views. Some experts believe that with the end of the war and the progress of international agreements, market sentiment is expected to improve, and energy prices may further decline, thus alleviating inflationary pressures. But others argue that even if oil prices fall, overall price levels will not fall rapidly in tandem, as the impact of previous shocks on costs such as food, transportation, and raw materials will persist, exhibiting a significant lag effect.

Overall, the end of the war does not equate to the end of economic pressures. While a ceasefire or agreement may bring short-term market optimism, the US economy will continue to face realities such as high prices, slow supply chain recovery, and a sluggish decline in inflation. These factors collectively determine that the cost of living for ordinary Americans will not decrease significantly in the short term, and economic recovery may be a lengthy process. Furthermore, this economic backdrop will continue to influence the political landscape in future elections, becoming a focal point of debate.