April 15, 2026: Iran & Inflation – What Comes Next?

The war in Iran and the closure of the Strait of Hormuz have driven a sharp increase in oil prices. Although the U.S. is a net energy exporter, it is not immune to rising global oil prices. In the near term, inflation will be felt not just in gasoline prices, but in plastics, fertilizers, and many other products that require oil.

As households pull back on discretionary spending to offset higher costs, economic growth is likely to slow. Early signs of this pullback may already be emerging, with the University of Michigan Consumer Sentiment Index falling to a record low of 47.6 last week. Slower growth could eventually ease inflation, but primarily through weaker demand rather than improved supply conditions.

Over the longer term, the cost of funding the war—already estimated at $25 billion¹ and potentially rising into the hundreds of billions—could add upward pressure to inflation by widening government deficits.

The ultimate impact on growth and inflation will depend on the duration of the conflict. With recent peace talks breaking down, a swift resolution appears unlikely. The longer the war persists, the greater the effect on near‑term inflation, medium‑term growth, and long‑term debt. In the interim, investors should expect elevated inflation volatility and a Federal Reserve likely to remain on hold until conditions become clearer.

Weekly Market Update: April 15, 2026