American consumers are feeling the painful impact of the war with Iran, as new data shows U.S. inflation accelerated in April to its highest level in nearly two years.

The Consumer Price Index rose 3.8% over the past 12 months — the sharpest increase since May 2023 — driven largely by a dramatic spike in energy costs. Surging gasoline and grocery prices accounted for nearly half of the jump, according to the Bureau of Labor Statistics.

The national average price for a gallon of gas has now climbed to $4.50, its highest level since July 2022.

The effective closure of the Strait of Hormuz due to the conflict has sent oil prices higher, rippling directly into American gas tanks, airline tickets, and everyday goods. Airfares alone jumped 20.7% in April as airlines passed on skyrocketing jet fuel costs.

For the first time in three years, wage growth is no longer outpacing inflation. Average paychecks rose just 3.6% while prices climbed 3.8%, meaning many Americans are now losing ground in real terms.

This inflation report lands as a major political and economic headache for the Trump administration. During the 2024 campaign, Trump promised to bring down prices. Now, just months into his second term, rising costs — particularly at the pump — are becoming a serious vulnerability ahead of the November midterms.

The data also complicates the Federal Reserve’s path. With inflation moving higher, expectations for interest rate cuts this year have all but vanished. Some analysts say rate hikes are now “firmly on the table” as incoming Fed Chair Kevin Warsh prepares to take over.

The timing could hardly be worse. Americans are highly sensitive to gas prices, and the weekly grocery bill getting more expensive is exactly the kind of pressure that can shift voter sentiment quickly.

While new car prices dipped slightly, the broader picture is clear: the war in Iran is no longer just a foreign policy issue — it is hitting American families where it hurts most, in their wallets.

Markets reacted negatively, with the S&P 500 and Dow Jones both opening lower on the news.

As the conflict continues to disrupt global energy flows, the question now is how long everyday Americans will be forced to pay the price at the pump and in the checkout line.