Economist Warns Iran War Could Trigger Food Inflation After Gas Price Surge
Economist Henrietta Treyz issued a stark warning on Monday, predicting that the soaring gas prices resulting from President Donald Trump's Iran war may soon be followed by another significant economic blow: higher food costs. Treyz, who serves as co-founder of Veda Partners and director of economic policy, emphasized this concern during an interview with MS NOW's Katy Tur.
Contrasting Economic Eras
Treyz drew a sharp contrast between the current economic landscape under Trump's second term and the conditions when former President Joe Biden was leaving office. "It's pretty amazing when you think about what the president inherited," she remarked. "We were coming off of continuous prosperity, lowering inflation, prices coming down, growth in the manufacturing sector."
She further elaborated that during that period, "there was literally nothing you could do to stop the economy under the A.I. boom and all the rest." Reflecting on the current situation, she lamented, "And now here we are," highlighting a shift from previous stability.
Immediate Impacts and Broader Consequences
Treyz pointed to specific disruptions already occurring, noting that the cost of jet fuel has surged significantly. This has led to "outright shortages" causing flight disruptions across Asia and prompting measures in Europe and the United States. However, she cautioned that more challenges are on the horizon.
"Everything that takes diesel or gasoline to move, whether it's everything you buy at Walmart or your groceries from the store, all that is still to come and to get more expensive," she predicted. This statement underscores the potential ripple effects of increased fuel costs on everyday consumer goods.
Long-Term Economic Concerns
The economist expressed deep concern about the broader economic implications of the Iran conflict. "So the long-term cost of this war, especially when you're judging it by the economy that the president was handed, is really just depressing to think about the growth that we could be under," she added.
Treyz concluded with a somber assessment of the current fiscal environment: "Instead, we're dealing with rising inflation again, the Fed can't cut interest rates. It's a bummer." This highlights ongoing struggles with inflationary pressures and monetary policy constraints, painting a challenging picture for economic recovery and stability in the near future.
