Rising oil prices could hit US economy harder than expected, warns Trump ally

A senior conservative economist and former Trump nominee has warned that the US economy may not be strong enough to handle a sustained spike in oil prices as the war involving Iran pushes energy costs higher.

EJ Antoni, who was once picked by President Donald Trump to lead the US Bureau of Labor Statistics, said the economy was already weaker than it appeared even before the conflict began.

According to him, inflation had been underestimated, and higher oil prices could now amplify the problem across the system, the Financial Times reported.

Why energy prices matter so much

Speaking ahead of the US Federal Reserve’s latest policy meeting, Antoni said oil at around USD 100 a barrel would be difficult for the US economy to absorb. He pointed out that lower energy prices through much of 2025 had helped keep inflation in check, but that dynamic is now reversing.

As fuel costs rise, they tend to feed into transport, manufacturing and everyday expenses. That, in turn, pushes prices up more broadly, making inflation harder to control.

Early signs of strain

The warning comes as global oil prices have climbed sharply. Brent crude has moved close to USD 110 a barrel following escalation in the Middle East, reflecting concerns about supply disruptions.

There are also signs the economy was already slowing before this. Recent revisions showed US growth in late 2025 was weaker than first estimated. Wholesale inflation data for February came in higher than expected, suggesting price pressures were already building.

The labour market has also shown cracks. Data from last month indicated a drop of around 92,000 jobs, wiping out much of January’s gains. Antoni pointed to weak job growth as another area of concern.

Political pressure is building

Higher fuel prices are not just an economic issue, they are a political one. With midterm elections not too far away, rising fuel prices are starting to worry Republicans. Petrol and diesel are the kind of costs people notice immediately. When they go up, it shows up in everyday spending, and that tends to shape how voters feel about the economy.

If fuel prices stay high for some time, it is not just an economic issue. It starts to shape how people feel about things more broadly, especially when everyday costs keep rising.

What the Fed is watching

The Federal Reserve is keeping a close eye on this. The big question is how much higher energy prices will spill over into the rest of the economy.

It puts the Fed in a familiar spot. If inflation starts picking up again, it may have to hold rates higher for longer. But going too far risks slowing growth even more. That balance has been tricky for a while, and rising oil prices only add to the pressure.

Questions around data and outlook

Antoni also raised doubts about how reliable official data is, particularly from the Bureau of Labor Statistics. He argued that the way economic numbers are put together needs a closer look.

Not everyone agrees, but it reflects the broader uncertainty right now. The data is not pointing in one clear direction, and there is still debate over how strong the economy really is.

What happens next

Much of this comes down to how long oil prices remain elevated. If it is just a short-term spike, the economy can usually manage. But if prices stay high, the impact spreads quickly, from transport costs to food to everyday services. That is when the strain becomes harder to ignore.