Iran war driving up inflation for Americans, CBO report says

WASHINGTON — The war with Iran is driving up inflation and borrowing costs may increase for Americans, according to a new report released on Tuesday by the Congressional Budget Office.

The report found the war was responsible for more than one-third of the increase in inflation this year, and inflation will continue to grow in the first quarter of next year. The CBO specifically blames the war for more than 40% of inflation during the second quarter of 2026 and an estimated half a percentage point of higher inflation during the first quarter of 2027. Interest rates are likely to rise as a result, making borrowing more costly the report found.

The main driver of increased inflation is fewer oil and natural gas shipments through the Strait of Hormuz and the Red Sea, the CBO report says.

The Congressional Budget is a non-partisan federal agency controlled by the U.S. Congress that conducts analysis related to the federal budget and the economy.

The estimate comes a day after the Pentagon’s watchdog found the war resulted in a shortfall of U.S. munitions and “bottlenecks” in supply chains.

The CBO report estimates it will be five years before the Pentagon is able to…

Original source: https://www.nbcnews.com/world