Airfares, diesel, and food prices all rising! Inflation making a comeback, with Republican midterm election pressures suddenly increasing

International oil prices have broken above $100 per barrel, and the national average price of gasoline in the United States has surpassed $4 per gallon. The costs of aviation fuel, diesel, and agricultural fertilizers are rising one after another. An energy-price shock triggered by the Iran war is pushing inflation pressure back onto U.S. consumers, and also pulling the Republican Party toward the political abyss of the midterm elections.

A sharp jump in crude oil prices has lifted the gasoline price average by more than one-third from about $3 per gallon before the action started. This not only erases the Trump administration’s few bright spots on inflation, but also triggers knock-on effects across multiple areas, including borrowing costs and food prices, steadily heightening voters’ anxiety about the cost of living.

According to several of the latest polls, Trump’s overall approval rating has fallen from 43.5% at the start of the war to about 41%, his job-approval rating for economic management has dropped to 37.2%, and his satisfaction with inflation handling is even lower, at 33.2%.

The Democrats lead by six points on the nationwide general-election ballot, and their advantage among independent voters is even higher—by 18 points. With the midterm elections approaching, the Republicans’ narrow majorities in both the House and the Senate are facing a severe test.

Gas prices tend to rise easily and fall hard

Rising energy prices have a clear degree of asymmetry, meaning the impact of this shock could last for months.

Neale Mahoney, director of the Stanford University Institute for Economic Policy Research, described this phenomenon as the “rocket and feather effect.” When factors such as war or supply disruptions push oil prices soaring, retail gasoline prices rise like a rocket. But after the related pressures ease, prices drift down slowly, like a feather.

Mahoney said that even if Middle East oil-producing countries resume full-capacity production and the Strait of Hormuz reopens normal shipping, “it still takes time for U.S. domestic oil prices to return to normal.”

He estimates that the U.S. average gasoline price may continue to climb through before June, after which it may ease back somewhat, but the pace will be very slow. Based on pricing in the futures market, related costs are likely to remain at elevated levels over the next several months. Pressure from energy bills may run throughout the entire midterm election cycle.

Multi-sector linkages: spreading from the gas station to the dinner table

This energy-price shock has moved beyond gasoline to broader consumer spending.

Rising aviation fuel costs are driving up ticket prices; higher diesel prices are increasing freight and logistics costs. Urea, a crude-oil byproduct used widely as a nitrogen fertilizer input in agriculture, is also rising in price—transmitting higher costs to some food prices.

Meanwhile, borrowing costs are also coming under upward pressure. Mortgage interest rate data show that since the outbreak of the Iran war, market interest rates have shifted back toward an upward trend, narrowing the financial flexibility that had been created by prior rate cuts.

Mahoney noted that every time the average gasoline price breaks above $3.5 per gallon, intense media coverage follows. “This will further inflame voters’ dissatisfaction and raise inflation expectations.”

Political fault line: independent voters are the key variable

The inflation predicament is rapidly eroding the Republican Party’s political base, especially among independent voters—an electorate group crucial to the outcome of the midterm elections.

According to CNN’s latest poll, among independent voters, the Democrats’ lead over the Republicans on the general-election ballot is as high as 18 percentage points. For Republican candidates vying for multiple swing districts, this figure creates significant pressure.

Senate Majority Leader John Thune has publicly acknowledged this political risk. In an interview with the media, he said, “Voters are voting with their wallets.” Even voters who lean toward supporting the Iran war from a national security perspective may have their positions shaken in the face of high and rising cost of living.

Last week, Trump himself, in a White House address, insisted that, “After the Biden administration, we had a dead, broken, and battered country—one where I made it the hottest country in the world, with no inflation.”

But the polling data show that most voters do not agree with this statement, especially on inflation. No matter how the Iran conflict unfolds, the stickiness of energy prices and consumers’ direct, personal experience of them will continue to test the Republicans’ ability to hold onto their majorities in both chambers of Congress over the coming months.

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