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Miami Herald
11 hours ago
- Business
- Miami Herald
White House Faces Risk of Economic Fallout From Iran Strike
EDITORS NOTE: EDS: SUBS beginning at 2nd graf to update and revise, PICKUP at "Taken together..."; SUBS graf beginning "Disputing that evidence..." for graf now beginning "The uncertainty prompted..."; CHANGES to "had" sted "have" in graf beginning "Jerome Powell..."; ADDS graf beginning "'I can assure you..." to add comment from press secretary; SUBS final graf to clarify and revise.); (ART ADV: With photo.); (With: IRAN-NUCLEAR-ASSESS, IRAN-AIRSTRIKES-PROTESTS, TRUMP-VOTERS-IRAN, U.S.-ISRAEL-IRAN, MARKETS, IRAN-EVIN-PRISON, CALIF-SHERIFF-IRAN, U.S.-IRAN-CHINA, FED-RATES WASHINGTON -- President Donald Trump on Monday began to confront the potential economic blowback from his military strikes on Iran, which threatened to send oil and gas prices soaring at a moment when U.S. consumers are already facing significant financial strains. The mere prospect of rising energy costs appeared to spook even Trump, who took to social media to push for more domestic drilling while demanding that companies "KEEP OIL PRICES DOWN." Otherwise, the president said, they would be "PLAYING RIGHT INTO THE HANDS OF THE ENEMY." "I'M WATCHING!" he added. By Monday afternoon, global oil markets appeared relatively unfazed by the rising tensions between the two nations, just days after Trump dispatched U.S. bombers on a mission to disable three Iranian nuclear sites. Prices rose over the weekend but fell Monday after Iran launched retaliatory missile strikes against U.S. bases abroad. But it remained unclear if Iran would continue to respond, or if its leaders might escalate the conflict, particularly by trying to block access to the Strait of Hormuz, the narrow waterway that serves as the critical entrance point to the Persian Gulf. The world ships substantial amounts of oil and liquefied natural gas through the passage, so any interruption to commerce could cause energy prices to surge globally. A spike in energy costs could prove especially difficult for American consumers and businesses this summer, given that it could arrive at about the same time that Trump plans to revive his expansive, steep tariffs on nearly every U.S. trading partner. Many economists expect those levies to push up prices after years of high inflation. In April, the president announced, then suspended, the sky-high duties, seeking to quell a global market meltdown over his disruptive and legally contested campaign to remake global trade. But Trump has not wavered in his plan to implement the tariffs again on July 9, and many economists expect companies -- which pay the duties when they source foreign products -- to pass the added costs down to their customers. Taken together, said James Knightley, the chief international economist at ING, the uncertainties around geopolitics and trade threaten to "squeeze households' spending power" in the coming months. He said that there was already "quite a lot of anxiety" about tariffs, and that the concern now was that there "could be another wave of pain for the consumer in the form of higher energy prices." "That would be a big negative," Knightley said. The White House did not respond to a request for comment. A spike in oil prices would only add to the mounting political headaches facing Trump, who has promised to salve stubbornly high inflation dating back to the coronavirus pandemic. The president has long viewed energy costs as a barometer for the effectiveness of his economic agenda, and he has crowed repeatedly about declining gas prices in recent weeks as a sign that his policies are working. For the moment, prices across the economy have remained relatively stable, according to the latest reading from the consumer price index. But economists widely believe that inflation could pick up as soon as this summer, particularly once the president's tariffs take full effect. The uncertainty prompted the Federal Reserve last week to leave interest rates unchanged for June, in a move that angered Trump, who lashed out at the central bank as he argued that inflation has eased and high borrowing costs are no longer necessary. Jerome Powell, the Fed chair, told reporters Wednesday that the central bank was "watching like everybody else is" to see how the conflict with Iran might affect prices. But he also acknowledged that the U.S. government was less dependent on foreign oil than it was in past Middle East conflicts that had roiled global energy markets. "What's tended to happen is, when there's turmoil in the Middle East, you may see a spike in energy prices, but tends to come down," Powell said. On Monday, analysts at Goldman Sachs said that a disruption to the oil supply could cause a small but notable contraction in global economic growth while increasing inflation, depending on the duration of the conflict and the extent to which Iran opts to interfere with the Strait of Hormuz. The strait is particularly important to China, which imports a significant amount of oil through the passageway, according to Secretary of State Marco Rubio, who urged Beijing over the weekend to take a stand against Iranian retaliation. "It will have some impact on us," he told CBS' "Face the Nation." "It will have a lot more impact on the rest of the world." Trump and his top aides later suggested that they were closely watching energy prices, and they appeared to signal that they could take executive action if necessary to keep them from rising. "I can assure you, the administration is actively and closely monitoring the situation in the Strait of Hormuz, and the Iranian regime would be foolish to make that decision," Karoline Leavitt, the White House press secretary, told reporters. On social media, Trump demanded that the Energy Department begin "NOW!!!" to increase domestic oil production. That prompted Energy Secretary Chris Wright to promise that the agency was "on it!" Kevin Hassett, the director of the White House National Economic Council, told CNBC earlier Monday that other oil-producing countries had significant reserves at their disposal, giving them "a lot of room to adjust" if Iran retaliated in a way that affected oil and gas, causing prices to surge. This article originally appeared in The New York Times. Copyright 2025
Miami Herald
11 hours ago
- Politics
- Miami Herald
Iran Fires Missiles at U.S. Base in Qatar
EDITORS NOTE: EDS: SUBS throughout to revise, reorganize and update; UPDATES list of related stories.) ; (ART ADV: With photos.); (With: IRAN-NUCLEAR-ASSESS, IRAN-AIRSTRIKES-PROTESTS, TRUMP-VOTERS-IRAN, MARKETS, IRAN-EVIN-PRISON, CALIF-SHERIFF-IRAN, U.S.-IRAN-CHINA, TRUMP-IRAN-ECON, U.S.-IRAN-THREATS); River Akira Davis contributed reporting. Iran on Monday launched a military attack on an American base in Qatar, the largest U.S. military installation in the Middle East, in retaliation for U.S. strikes on three critical Iranian nuclear sites. Qatar and the United States said that air defenses had intercepted the missiles, and the Defense Department said there were no reports of U.S. casualties at the base, Al Udeid. The strike stoked fears that the conflict with Iran might intensify, drawing in the United States further and expanding it across the region, but at the same time there were signs that Iran might be looking for an off-ramp. Three Iranian officials said their government had given advance notice that attacks were coming, as a way to minimize potential casualties. The officials said Iran needed to be seen striking back at the United States for its attack over the weekend -- but in a calibrated way. A similar approach was used in 2020, when Iran gave a heads-up before firing ballistic missiles at a U.S. base in Iraq in reprisal for the assassination of its top general. Earlier in the day, as the United States and Britain braced for an attack, they warned their citizens in Qatar to shelter in place. Qatar later announced that it had closed its airspace, and the United Arab Emirates did the same after the attack. The airspace closures disrupted flights into and out of Doha and Dubai, two major hubs of international air travel. The Iranian assault came as Israel launched wide-ranging strikes on Tehran, Iran's capital, on Monday and promised more "in the coming days," pressing on with its bombing campaign two days after the United States attacked three Iranian nuclear sites. The new Israeli barrage, which a military spokesperson said targeted a paramilitary headquarters, a notorious prison and access routes to the Fordo nuclear enrichment site that the U.S. military bombarded, came as Iran fired salvos of missiles that sent Israelis to huddle in shelters, and as world leaders called for de-escalation. Iran's attack on Al Udeid came after its foreign minister, Abbas Araghchi, met with a key ally, President Vladimir Putin of Russia. While the Russian leader called the U.S. strikes "absolutely unprovoked aggression," he stopped short of offering concrete support for Iran. Prime Minister Benjamin Netanyahu of Israel, in a televised address Sunday night, said that his country was "very, very close" to realizing its objectives in the conflict but did not say when its bombing campaign would end. Though President Donald Trump declared that Iran's nuclear program had been "totally obliterated" by the U.S. bombings, the actual state of the program was far murkier, with senior officials conceding they did not know the fate of Iran's stockpile of near-bomb-grade uranium. Here's what else to know: -- Possible response: Trump's decision to attack Iran, and Iran's retaliatory attack Monday, dimmed hopes for a negotiated solution to end the fighting. While U.S. officials say that Iran has depleted its stockpile of medium-range missiles, the country still has an ample supply of other weapons, including rockets and drones, some of which would -- if employed -- give U.S. forces in the region only minutes of warning. -- Economic impact: Oil prices fell and stocks climbed after Iran fired missiles at a U.S. military base in Qatar. Before the attack, investors appeared cautiously optimistic about the potential economic fallout from the U.S. strikes over the weekend, and of any moves Iran might make that would disrupt oil shipments through the Strait of Hormuz, a critical transit point for global oil supplies. -- Calls for peace: After European foreign ministers met to discuss Iran, the European Union's chief diplomat, Kaja Kallas, said that "the concerns of retaliation and this war escalating are huge." The International Atomic Energy Agency held an emergency meeting in Vienna, where the head of the agency, Rafael Grossi, warned that "violence and destruction could reach unimaginable levels" if Iran, Israel and the United States do not find a path to diplomacy. -- U.S. strikes: Pentagon officials described their attack on three nuclear sites as a tightly choreographed operation that included B-2 bombers carrying 30,000-pound bunker-buster bombs and submarine-fired Tomahawk cruise missiles hitting a trio of sites in less than a half-hour. A senior U.S. official acknowledged that the attack on Fordo had not destroyed the heavily fortified site, but it had been severely damaged. This article originally appeared in The New York Times. Copyright 2025
