The US-Israeli choice to strike Iran leaves Americans facing explosive price increases, an energy shock and persistent pressure on incomes, in a development that threatens to turn into a widespread economic crisis.
The US economy is heading towards a full-scale financial turmoil, as the latest data shows that inflation not only persists, but is accelerating dangerously.
The reality is shaping a harsh backdrop: war, energy and inflation now act as communicating vessels, effectively cancelling basic economic commitments and creating a clear economic boomerang for American citizens themselves.
Inflation – shock
The data for February reveal a worrying acceleration in prices. Imports increased by 1.3% and exports by 1.5%, which, according to Trust Economics, corresponds to an annual inflation rate of 19.6%.
The U.S. Bureau of Labor Statistics confirms that these are the largest increases in recent years, with the most worrying element being that the price increases have spread to the entire economy. This means that inflation is not temporary, but is acquiring permanent and structural characteristics.
Energy shock before the peak
The situation is becoming even more dangerous due to the surge in energy prices. Trust Economics reports that these figures were recorded before the full impact of the rise in oil, which has already reached 50% since the beginning of the war.
Increases in natural gas and fuel are adding to the pressure, leading to chain price increases in transportation, production and consumption. Energy acts as a catalyst that spreads inflation throughout the economy, intensifying the crisis.
Economic pessimism and collapse of expectations
The worsening economic situation is now also reflected in society. According to a poll by The Wall Street Journal, only 25% of Americans believe that they can improve their standard of living, while almost 70% believe that the “American dream” is dead or never existed.
This trend reveals that economic pressure is turning into deep social pessimism, with citizens feeling that they are losing control of their economic reality.
The perennial problem of wages
Behind the price crisis there is a deeper problem that concerns the structure of the economy. Federal Reserve data shows that just 51.9% of national income goes to workers, a rate that harks back to the 1930s.
At the same time, corporate profits are growing faster than the economy, meaning that growth is not translating into income growth for the middle class. Wages are stagnant while prices are rising, leading to a steady loss of purchasing power.
The housing crisis
This imbalance is clearly visible in the housing market. The average American household can afford about $2,093 per month for housing, while the average mortgage payment reaches $2,259.
This difference reflects a harsh truth: a large part of citizens cannot meet basic needs without financial pressure. This situation affects not only the present, but also the ability to create wealth in the future.
Trump’s promises and reality
Donald Trump was committed to cheap energy and a reduction in the cost of living. However, developments show that reality is moving in the exact opposite direction.
The energy crisis, inflation and pressure on incomes compose a picture that in practice cancels the main campaign promises. What was presented as a plan to strengthen the economy is evolving into an economic boomerang with direct consequences for citizens.
The Fed in a historic impasse
In this environment, the Federal Reserve is faced with a difficult equation. Trust Economics warns that without aggressive interest rate hikes, inflation will continue to accelerate.
However, such a move carries serious risks for the economy, as it could lead to a recession. On the other hand, inaction could cause prices to rise even more.
This is an impasse with no easy solutions, highlighting the limits of monetary policy.
