Politico reports:

President Donald Trump’s war threatens to push gas prices past the record high under former President Joe Biden. They aren’t the only numbers the White House staff is sweating.

While record high prices at the pump are a persistent concern, the bond market’s spike over the last several days also has aides and allies fretting, worried that borrowing costs will pummel a nation that runs on credit and make it harder for the Federal Reserve to cut rates.

The two moving in tandem are a double whammy for a White House working to assuage voters’ cost-of-living concerns ahead of an expected difficult midterm election.

“The White House staff is absolutely, totally freaked about bond yields and gas prices,” said a person close to the White House, who, like others in this story, was granted anonymity to discuss private conversations.

Five people familiar with the West Wing’s thinking, including three of Trump’s former energy advisers, all granted anonymity to discuss the internal conversations, said the record $5.02 gas price, hit in 2022, is a symbolic milestone, sure to set off a wave of negative news coverage that the Trump administration is looking to avoid.

And Biden’s high mark is one that Trump and leading administration officials have used as a yardstick to show the prior administration was worse for Americans.

But with the Iran war in its third month, and no end in sight, there is little the administration can do except watch the figures tick up day after day.

“There is a lot of anxiety that they have not been able to close a deal,” said one of the former Trump energy advisers.

White House spokesperson Taylor Rogers disputed the premise, insisting the administration was not taken by surprise.

“This is false,” she said in an emailed statement. “As usual, Politico is relying on anonymous sources to push fake news. President Trump and his energy team anticipated short-term market disruptions, communicated them openly to the American people, and implemented an aggressive plan to mitigate any impacts. President Trump will never allow Iran to possess a nuclear weapon, and he will continue to advance America’s core national security interests. When the President forces this conflict to a successful end, gas prices will drop back to multi-year lows and global energy markets will be much more stable in the long term.”

The average price of gas ticked up again Thursday to $4.56, up about 50 cents from one month ago and more than $1.50 since the war began. Summer driving season, which kicks off this weekend with Memorial Day, is expected to send prices even higher.

If the Strait of Hormuz is closed through June, U.S. gas prices will likely hit a new record high by July 4, said Patrick de Haan, petroleum analyst at GasBuddy. He said the booming U.S. exports of fuel will also cause domestic prices at the pump to rise. Already, U.S. gasoline inventories hit the lowest level for May in 12 years, he said.

“If we get into the heart of the summer driving season and the strait is closed, there’s going to be a lot more pressure,” he said. “There’s more consumption, not just in the U.S., but abroad as well.”

That possibility portends poorly heading into election season. [Continue reading…]