When rising gas prices began to cut into Americans’ paychecks, President Trump’s top economic adviser sought to offer a note of reassurance — both for struggling families and for his increasingly nervous political party.
It was late April, about two months into the war with Iran, but Kevin Hassett, the director of the National Economic Council, argued that Americans were actually in strong financial shape. And as a result, he added, the gains in the economy seemed poised to boost Republicans’ political prospects in time for the November midterms.
“People look at their wallets, and they vote,” Mr. Hassett told reporters that day, citing “massive economic literature that says that that’s how you predict elections.”
The first summer report card, which arrived on Tuesday, offered an early bit of positive news for the White House: Consumer prices fell 0.4 percent in June. It was a notable improvement from the three-year high registered in May, even though prices overall were up 3.5 percent from the same time last year, a rate still well above policymakers’ 2 percent target.
But the report arrived precisely as the United States and Iran returned to open conflict, threatening to reignite the very sort of economic chaos that had caused inflation to soar to a three-year high in the first place. By Tuesday morning, oil and gas prices seemed poised to climb, raising the odds that a recent reprieve at the pump could prove short-lived, squeezing families and businesses once again in the coming months.
The split-screen developments seemed to perfectly frame the political stakes for Mr. Trump, as he races against the clock to assuage voters who increasingly blame the White House for their financial strain. A significant and prolonged escalation in the war could erase recent progress on inflation, angering the public and forcing the Federal Reserve to raise interest rates, a move that could further saddle families with new expenses.
Despite those mounting risks, Mr. Trump on Tuesday appeared to shrug off any reason for concern. Instead, he claimed his economic agenda was working and blamed the earlier rise in prices on his predecessor, President Joseph R. Biden Jr., even though prices have risen recently because of Mr. Trump’s war.
“Prices are coming way down, and we’re doing a great job. And remember that for the midterms,” he told reporters in the Oval Office.
For Mr. Trump, the durability of those improvements may well hinge on the fate of a war he once promised would be over in a matter of weeks.
At one point on Tuesday, the renewed fighting between the United States and Iran caused Brent crude prices, the global oil benchmark, to jump back above $86 per barrel for the first time in a month. Gas prices also reached above $3.85 per gallon nationally, according to AAA, which recently predicted another round of increases in energy costs if hostilities linger.
Until recently, economists had been forecasting a steady cooling in inflation through the end of the year, as officials in Washington and Tehran struck a critical if tentative cease-fire. But that outlook has been complicated by the recent breakdown in talks, which has once again imperiled the Strait of Hormuz, the critical shipping thoroughfare in the Persian Gulf.
“It does put in doubt our view we were going to see a steady, not dramatic, but a steady decline in inflation in the second half of the year,” said Kathy Bostjancic, the chief economist at the financial services company Nationwide, referring to the escalation with Iran.
Ms. Bostjancic pointed to a number of additional pressures that could contribute to higher prices beyond the war. They included the effects of the president’s tariffs, which Mr. Trump is expected to ratchet up soon, and the boom in artificial intelligence, which had contributed to a shortage in computer chips and caused prices to spike in consumer electronics.
Those persistent risks prompted Democrats on Tuesday to issue their own attack, arguing that a recent slowdown in inflation did not change the realities that prices were still too high for many American families.
“Inflation continues to be too high as families pay the price for Donald Trump’s failed economic agenda,” Senator Elizabeth Warren of Massachusetts, the top Democrat on the chamber’s banking committee, said in a statement. “Instead of lowering costs, Donald Trump is doubling down on his illegal war in Iran.”
Despite economists’ warnings, Mr. Trump had insisted for months that prices would recede quickly once the war ended, while maintaining that concerns about affordability were a “hoax.” But as the conflict has pressed on, adding to voters’ economic anxieties, the president has started to shift to another familiar tactic: browbeating companies in a bid to force down prices in time for the midterm elections.
In recent weeks, Mr. Trump has primarily attacked energy giants, demanding that they reduce the prices they charge at the pump. Even though economists have long warned that it would take months for gas to return to its prewar levels, Mr. Trump has largely shrugged off the realities of the market and demanded that sellers “must get their Prices down, IMMEDIATELY!”
Already, that spike in energy has pushed up the cost of groceries and other shipped goods, prompting Mr. Trump to expand his jawboning to include retailers. Earlier this month, the president took public aim at Walmart, which he claimed would be “lowering prices, by a lot, at my Administration’s request.”
While the retailer did announce discounts, it did not actually mention Mr. Trump in its news release about them, which was posted online before the president shared his views on social media. Still, Mr. Trump insisted that “other Retailers should follow” the lead of Walmart and cut costs.
Mr. Trump’s threats represented a contradiction of sorts for a president who has long argued that the government should take a hands-off approach to private enterprise. But his actions also spoke to a growing sense of political urgency ahead of November’s elections.
The threats resembled those he issued at the start of his second term, when another conflict — a nascent global trade war — had started to saddle families and businesses with higher costs. Then, too, economists warned about the costs incurred from the president’s policies, yet Mr. Trump doubled down by hammering companies like Walmart for their business practices.
