Iran and Ukraine wars push US affordability back, analyst says

Rising energy costs tied to overseas conflicts have reversed recent progress on American affordability, according to an opinion column by E.J. Antoni published by Fox News. Antoni contends that the setback is temporary and that affordability will improve again once the wars with Iran and in Ukraine end.

Antoni traces the cost-of-living problem to 2022, when prices rose much faster than earnings. He writes that the average American's weekly paycheck grew roughly 17 percent during President Joe Biden's term but bought about 4 percent less. Families responded by canceling vacations, delaying vehicle purchases and putting necessities such as rent, prescriptions and food on credit cards. Even after inflation slowed, he notes, costs remained high, because inflation measures the rate of price increases rather than the prices themselves.

The column argues that conditions improved after January 2025. Real, inflation-adjusted weekly paychecks rose about 2 percent on average from January 2025 through February of this year, which Antoni describes as reversing roughly half of the cumulative losses from the Biden years. He credits tax and regulatory reform and energy policy with supporting economic activity and wage growth while holding inflation down.

That progress, Antoni writes, was disrupted when the Iran war broke out. He says global energy markets and supply chains were severely disrupted and that oil prices quickly climbed from $60 or $70 per barrel, depending on the market, to $100 or $120. Gasoline prices followed, and the energy shock has since spread to other sectors. He points to diesel-powered farming and transport, fertilizer made from natural gas, and airfares, plastics and manufactured goods as examples of costs that have risen.

Antoni also cites Ukrainian strikes on Russian energy infrastructure as a factor that has worsened the shortage of oil and petroleum products, especially diesel. He says the combined effect has been higher prices and lower real earnings for households.

Housing affordability has been affected as well. According to the column, homeownership affordability hit a three-year high in February, a marked improvement from the record low of the Biden years. It has since fallen each month to its lowest level since July 2024, as mortgage interest rates rose. Antoni attributes the rate increase to the energy shock: as fuel supplies fell and energy prices rose, inflation expectations increased, and lenders demanded higher returns to compensate.

Antoni distinguishes the current pressures from the runaway inflation that peaked in 2022 at an annual rate above 9 percent. He argues that today's price increases stem from an energy shock originating overseas rather than from government spending, borrowing and money creation, and that this difference points to a different remedy. He says the domestic economy remains sound, citing investment growth, manufacturing expansion at the fastest pace in at least four years, private-sector job gains, productivity growth linked to artificial intelligence, and continued earnings growth.

In his assessment, energy markets will normalize once the overseas conflicts are resolved and costs will begin to decline, with lower energy prices easing pressure on consumer staples and inflation expectations falling, which would bring interest rates and mortgage costs down. Antoni acknowledges that the adjustment will not happen overnight because supply chains take time to recover.

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Caroline Mercer

World News Correspondent

Caroline Mercer covers public affairs, politics, business, culture and daily news for Core Memo. The role focuses on verification, context, and clear explanations for readers.

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