Consumers hit by one-two punch of oil and rates from Iran war. The estimated bill is $1,700 per household
Consumers are facing a double-whammy of jumping oil prices and Treasury yields amid the U.S. war with Iran that is leaving them increasingly cash-strapped. Crude prices reaccelerated in recent weeksโฆ
Consumers are facing a double-whammy of jumping oil prices and Treasury yields amid the U.S. war with Iran that is leaving them increasingly cash-strapped.
Crude prices reaccelerated in recent weeks as fighting between the U.S. and Iran has ramped back up, a development that will lead to higher prices at the pump. On top of that, the 10-year Treasury yield jumped this week to its highest in 19 years, threatening to intensify affordability challenges for consumers as borrowing costs rise for items like homes and cars.
"Consumers are under a lot of financial pressure," said Mark Zandi, chief economist at Moody's Analytics.
The total bill per household since the U.S.-Iran conflict began is around $1,760, according to an analysis from Moody's Analytics as of Sept. 11.
Zandi said $930 โ or more than half โ of that total bill for households comes from higher costs for energy, a category that includes pressures from rising prices on items like gasoline, diesel and jet fuel. Cumulatively, Moody's found that U.S. consumers have spent more than $121 billion extra on energy since the war began.
Another $425 of that $1,760 stems from higher interest rates since the war broke out. The final $405 comes from higher military spending, which Zandi said consumers will foot the bill for through either national debt expansion or increased taxes.
U.S. crude oil prices topped $105 per barrel on Tuesday, its highest closing level since mid May. Tuesday's jump came despite Energy Secretary Chris Wright's assurance to CNBC that the closure of a Saudi Arabian pipeline would only last a few days.
The average gallon of gas in the U.S. exceeded $4.32 on Tuesday, up 6% month over month and 36% from a year ago, according to AAA . Labor Day travelers earlier this month faced their highest prices at the pump for the holiday on record.
Read Full Story at CNBC Economy โ
