Consumer inflation edged ever so slightly up to 2.43 percent over the past 12 months in February while average weekly earnings slowed slightly to 4.1 percent, according to the latest data compiled by the U.S. Bureau of Labor Statistics, in what might be the last good news on inflation for a little while.
These two reports were compiled in mid-February prior to the U.S. and Israel launching a new offensive against Iran to destroy its nuclear weapons, missile, naval, air force and drone capacities.
In response, Iran is threatening vessels passing from the Persian Gulf through the Strait of Hormuz to the Gulf of Oman — and now traffic through the strait is down more than 95 percent for what used to be 138 cargo and tanker ships a day according to the Joint Maritime Information Center, with only four tankers making it through since March 3. About 150 ships are currently stranded.
Meaning, 20 percent of the world’s oil supply has been at a standstill for almost two weeks now, causing tremendous spikes in oil prices — light sweet crude is currently at $87 a barrel as of this writing — and when the March report on inflation is released next month, it will be reflected there.
Just the slightest gyrations on inflation and earnings seen in February moved when break-even on the inflation that began in 2021 would be felt, from December 2026 to now February 2027.
Just think about that, the post-Covid inflation — printing trillions of dollars at the same time of global economic lockdowns halting production — was so bad that American households still haven’t broken even, and might not for another year or so, even as price increases have been cooling since mid-2022.
And the oil price spikes now being seen will negatively impact that break-even date, no question.
But President Donald Trump says, it’s worth it, writing on Truth Social on March 8 that the high prices are a “small price to pay” for “the destruction of the Iran nuclear threat”.
If so, then time will be a critical factor, that is, how quickly can Iran’s military nuclear programs be completely dismantled and in the meantime, how soon can the Strait of Hormuz be secured?
And what would that mean?
Taking the nuclear reactors at the power plants offline? Recovering the fissile materials buried underground at Iran’s nuclear weapons facilities from June 2025’s Operation Midnight Hammer?
And how to secure the Strait of Hormuz itself?
However it must be done, it must be done. It’s the fastest way to end the current crisis.
High oil prices are the enemy’s weapon, the one that can reduce political support for the President and therefore the war — making it more difficult to finish the job. The President knows this and is using overwhelming force in a highly compressed campaign. The sooner victory is achieved, the better. And when it’s safe to do so, get the Strait of Hormuz reopened.
Robert Romano is the Executive Director of Americans for Limited Government Foundation.
