Jerome Powell said the economic impact of the Iran conflict is “substantially less” for the United States than for Europe and Asia, though rising fuel costs are beginning to weigh on consumers.
“If this goes on longer and prices rise further, we’ll feel it more,” he said, noting that Americans are already facing higher costs at the pump. “We’re very aware that people are experiencing higher gas prices across the country, and that hurts.”
Gasoline prices are expected to climb further in the coming days as the summer driving season begins. The national average retail price reached $4.229 per gallon on Wednesday, the highest level since July 2022, according to AAA data.
Powell warned that rising fuel prices could weigh on economic growth, as households cut back on other spending. “When gas prices go up, that’s disposable income coming out of people’s pockets, so they’ll spend less elsewhere. That will have an impact on GDP,” he said.
However, he added that it is not yet clear whether such pressures would warrant an interest rate cut.
