What a Difference a War makes. In 1/2026, Trump (R) said to G7 Leaders and at the World Economic Forum in Davos, that His Team had “Defeated” Inflation in the U.S. “Grocery prices, energy prices, airfares, mortgage rates, rent and car payments are all coming down, and they’re coming down fast,” He said.
At the time, U.S. Inflation stood at 2.4% year-over-year, compared to 2.7% overall in 2025. When Biden (D) left Office, inflation stood at 3%, down from a post-Pandemic High of 9.1% in 6/2022, when Prices were Skyrocketing Globally. Still, while Inflation Eased somewhat under Trump, it remained Higher than the Federal Reserve’s Long-Term Annual Target of 2%.
Now the U.S. and Israel’s War in Iran, is expected to make Inflation Worse, according to a New Report from the Organization for Economic Co-operation and Development (OECD). The OECD Predicts that America could have the Highest Inflation in the G7 by the end of 2026, in large part Due to the War and the Ongoing Impact of Trump’s Tariff Policy.
The Projected 2026 Inflation Rates for G7 Countries:
Canada 2.4% (up from 2.1%)
France 1.8% (up from 0.9%)
Germany 2.9% (up from 2.3%)
Italy 2.4% (up from 1.6%)
Japan 2.4% (the outlier, down from 3.2%)
U.K. 4% (up from 3.4%)
U.S. 4.2% (up from 2.6% in 2025)
Some of the very Staples Trump said were getting Cheaper are getting more Expensive. Things could get Worse as the war drags on. The OECD warns that Inflation could Spike as the Middle East Conflict disrupts Supply Chains and the Normal Flow of Trade. The Longer it Drags On, the Worse things could get. Trump can No Longer Claim the Cost of Energy is Down. It’s Top-of-Mind for many Americans.
Gas Prices are Up more than 30% in 3/2026 amid Iran’s Chokehold on Shipments through the Strait of Hormuz, and Attacks on Eenergy Infrastructure like Refineries, Gas Plants and Oil Fields throughout the Middle East. Even if the War Ends, Energy Prices are likely to Remain Above the Pre-War Baseline for Months, Thanks to Damage to Energy Infrastructure.
What about Groceries? As PBS Reports, Farmers in the U.S. and Elsewhere, are Worried about the Prices for Key Components of the Fertilizers they need to Grow their Crops, which are Normally Shipped through the Strait of Hormuz. That’s One Reason the Cost of Groceries is likely to Rise.
The U.S. Department of Agriculture (USDA) Predicts Food Prices will Rise 3.6% this year, with the Cost of Groceries Rising 3.1% alone, Faster than the 20-year Average of 2.6%. Beef, Fish, Vegetables, Sweets and Baked Goods are All Projected to become more Expensive. 5 essential Money Moves to make Once you’ve Saved $50,000
Tariffs aren’t Helping: The OECD adds that Trump’s Tariffs, and Related Counter-Tariffs, are still Contributing to Inflation. While the U.S. Supreme Court Ruled that Trump could Not Impose Tariffs Under the International Emergency Economic Powers Act (IEEPA), He still has Many Tariffs in Place on Many Imports, and Other Countries have Responded by Imposing Tariffs on U.S. Goods.
According to Yale’s Budget Lab, the U.S. currently has an Effective Tariff Rate of 10.5%. Outside of Trump’s since Rescinded 2025’s Tariffs, that’s the Highest Rate since World War II. When He took Office 1/2025, the Rate was about a Fifth of that, at 2.3%, according to an Analysis from the University of Pennsylvania.
Tariffs continue to Add to the Cost of Iimported Cars, Electronics, and Clothing, According to Yale. Inflation is Concerning enough. But its likely Consequence, Slower Economic Growth, is Equally Worrying.
As the Costs of Living and Borrowing Rise, Demand and Investment Fall, Affecting Businesses and Employment. The Federal Reserve often Boosts Interest Rates to Help keep Higher Inflation in Check, Slowly the Flow of Money through the Economy.
The OECD Expects U.S. GDP Growth will Slow in 2026 to 2%, Compared to a 2.9% Global Average. It looks like Trump’s War with Inflation, and its Impacts, is Far from Over.
NYC Wins When Everyone Can Vote! Michael H. Drucker
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