Airfare, diesel, and food prices are all rising! Inflation is making a comeback, and Republican midterm election pressure is surging.

```

International oil prices have surpassed $100 per barrel, U.S. gasoline averages over $4 per gallon, and the costs of aviation fuel, diesel, and agricultural fertilizer have soared. An energy price shock triggered by the Iran war is shifting inflationary pressure back onto American consumers, pushing the Republican Party into a political abyss ahead of the midterm elections.

A sharp rise in crude oil prices has driven up average gasoline prices by more than a third from around $3 per gallon before the action began. This not only erases one of the few notable achievements of the Trump administration on inflation, but also sets off chain reactions in areas like borrowing costs and food prices, intensifying voters' anxieties about living expenses.

According to several recent polls, Trump's overall approval rating has dropped from 43.5% at the start of the war to about 41%. His economic management rating has fallen to 37.2%, with satisfaction regarding inflation handling even lower at 33.2%.

Democrats lead by six percentage points in the congressional generic ballot and by as much as 18 points among independent voters. As the midterm elections approach, the Republicans’ slim majority in both chambers of Congress faces a stern test.

Rising Oil Prices Are Hard to Reverse

Energy price rises show obvious asymmetry, making this shock’s effects likely to persist for months.

Neale Mahoney, director of Stanford’s Economic Policy Research Institute, describes this phenomenon as the "rocket and feather effect": when war or supply disruptions cause oil prices to soar, gasoline retail prices shoot up like a rocket; but when those pressures ease, prices fall like a feather—very slowly.

Mahoney points out that even if Middle Eastern oil producers return to full production and the Strait of Hormuz resumes normal shipping, "it will still take time for U.S. domestic oil prices to return to normal."

He estimates U.S. gasoline averages may continue rising until June, and then possibly decline, but at a very slow place. Judging by futures market pricing, relevant costs will likely remain high for months ahead. Energy bill pressure may run throughout the entire midterm election cycle.

Multi-sector Linkage: Spreading from Gas Stations to Dining Tables

This energy price shock has spread from gasoline to broader consumer sectors.

Rising aviation fuel costs are pushing up airfares; higher diesel prices are driving up freight and logistics costs; crude oil byproduct urea, widely used as a nitrogen fertilizer in agriculture, has seen rising prices pass through to certain food prices.

Meanwhile, borrowing costs are under upward pressure. Mortgage rate data shows that since the Iran war broke out, market interest rates have trended back up, tightening the financial space created by prior rate cuts.

Mahoney notes that whenever gasoline averages exceed $3.5 per gallon, intensive media coverage follows, "which will further inflame voter dissatisfaction and raise inflation expectations."

Political Divide: Independent Voters as the Key Variable

The inflation dilemma is rapidly eroding the Republican Party's political base, particularly among independent voters who are crucial for the midterm election outcome.

According to CNN’s latest poll, among independents, Democrats lead Republicans by as much as 18 percentage points in the generic ballot—a significant challenge for Republican candidates in numerous swing districts.

Senate Majority Leader John Thune has publicly admitted this political risk, saying in a media interview, "Voters vote with their wallets." Even those who favor the Iran war from a national security standpoint may change their positions when facing high living costs.

Trump himself last week insisted in a White House speech, "After the Biden administration, we're a lifeless, battered nation, but I made it the hottest country in the world, with no inflation."

However, polls show most voters do not agree with this statement, especially on the issue of inflation. Regardless of how the Iran conflict unfolds, the persistence of energy prices and consumers' direct experience will continue to test the Republican Party’s ability to hold its congressional majorities in the months ahead.

Risk Warnings and DisclaimerThe market has risks, investment must be cautious. This article does not constitute personal investment advice, nor does it consider the special investment goals, financial circumstances, or needs of individual users. Users should determine whether any opinions, viewpoints, or conclusions here fit their own situation. Investing based on this is at your own risk. ```