Trump Team Tracking Economic Risks During Iran War

One of the biggest questions hanging over President Donald Trump's strikes on Iran — and the ceasefire that followed — was how much damage a prolonged conflict could do to the U.S. economy.

Behind the scenes, Trump and his advisers heard repeated warnings from Cabinet officials, political allies and business leaders that an extended conflict could hit Wall Street, squeeze Main Street, and drive energy prices sharply higher.

Treasury Secretary Scott Bessent spoke with Trump about market reaction and the broader economic outlook as it related to how long the war might last, people familiar with the matter told The Wall Street Journal.

The two also reportedly discussed what Treasury could do if the conflict stretched eight to 12 weeks, including contingency measures and the risk of rising gasoline prices for American consumers.

Bessent reportedly told Trump that Asia and Europe would be more vulnerable than the U.S. to war-driven energy shocks, given their heavier reliance on imported fuel.

Last month, Treasury issued a short-term authorization allowing the sale of Iranian oil already at sea in an effort to ease potential supply disruptions.

National Economic Council Director Kevin Hassett also advised Trump on the possible economic impact, offering guidance on how the conflict could ripple through growth, inflation, and markets.

White House spokesman Kush Desai told the Journal that Trump "has been clear about short-term disruptions" from the war.

The administration "has been diligently working with the private sector to mitigate these disruptions," Desai said, pointing to ongoing coordination with business leaders.

Trump, who closely watches the stock market and broader economic indicators, offered mixed signals after the U.S. attacks in late February about how quickly he wanted the fighting to end.

The pressure was real, with key economic indicators flashing warning signs as the conflict unfolded.

Consumer prices rose 3.3% in March from a year earlier, up from 2.4% in February, the Labor Department said Friday, underscoring renewed inflation concerns.

Oil spiked above $100 a barrel before retreating, while gas prices climbed above $4 a gallon, squeezing household budgets nationwide.

Stocks fell sharply in the early days of the conflict and then recovered, often moving in response to Trump's public comments about the war.

In an interview with Fox News' "Sunday Morning Futures," Trump said his economic team backed the strike as a necessary move despite potential risks.

"I tell my economic advisers, I say, 'I'm sorry, fellas, we're in great shape. We have to go and take a little journey down to Iran, and we have to stop them from having a nuclear weapon.' They all said, 'We agree.'"

In a recent letter to shareholders, JPMorgan Chase CEO Jamie Dimon warned that if the war continued, there would be "significant ongoing oil and commodity price shocks, along with the reshaping of global supply chains, which may lead to stickier inflation and ultimately higher interest rates."

Oil executives also raised alarms privately, warning that the situation could escalate quickly if key supply routes were disrupted.

They told administration officials that a prolonged closure of the Strait of Hormuz — which carries about 20% of the world's daily oil and liquefied natural gas supplies — could deepen the global energy crunch and strain supply chains.

Farm groups raised concerns, too, particularly about fertilizer costs tied to disruptions in global shipping lanes.

Caleb Ragland, chairman of the American Soybean Association, told the Journal that the point "is this is kind of an emergency for our farmers, and we need that supply to be open."

Others were less concerned and argued the economic effects would be short-lived.

Matt Coday, president of the Oil & Gas Workers Association, told the outlet that rising gasoline prices tied to the war were "a temporary blip."