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.
“There is definitely a concern of just not gas, but everything — all these benchmark costs being more under Trump than under Biden,” said one of the former Trump administration officials. “Inflation is higher today than when Biden handed off the administration to Trump, that's what they're concerned about. … They're freaking out about meat prices that they're literally threatening Justice Department investigations into price fixing. I think they look at every benchmark and have concerns.”
Now, as it appears the gas price record may fall, the second former Trump energy adviser, called the mood inside the White House a “freak out,” noting there are few policy levers that could be pulled to avoid hitting that target.
Similarly, a third former Trump energy adviser, granted anonymity to speak candidly, said, “Obviously everyone’s stressed about gas prices and looking for levers to pull.”
“And sometimes there’s just not a lever that you can pull in Congress,” the person said.
On Wednesday, Trump told reporters that he is in no rush to negotiate a deal with the Iranian regime until Tehran opens the Strait of Hormuz, through which 20 percent of the world’s oil and gas supplies travel. Its closure is a primary driver of high gas prices.
“I’m in no hurry,” he said. “You know, everyone thinks, ‘Oh the midterms, I’m in a hurry.’ I’m in no hurry.”
Trump, last week, emphasized to Fox News host Brett Baier that gas prices were still below Biden’s peak.
“Well, lower than Biden,” Trump said. “Excuse me, lower than Biden, and much lower than people thought they'd be.”
While gas prices are an in-your-face reminder of high costs for the average voter, some Trump allies believe the bigger threat to the GOP’s midterm prospects is the yield on the 10-year Treasury, which is at its highest point since 2023. The yield on the 30-year hasn’t been this high since before the 2008 financial crisis.
When yields rise, borrowing costs follow — on mortgages, car loans and credit cards — hitting consumers in new, and more painful, ways.
And that comes amid a surge in beef prices, anxious GOP donors worried about the midterms and young conservatives fleeing MAGA over disillusionment with the war in Iran and housing costs.
White House officials maintain that Americans trust the president and understand the necessity of the Iran war.
“I think voters trust the president on energy prices and gas prices,” said a senior White House official. “People trust him on that, like he said, short- term pain for long-term gain. That's really the messaging. We know it's not the best right now, but we're working on it, and obviously taking out Iran is better in the long term, right?”
But as energy prices have ticked up, Trump’s approval rating has cratered, including among Republican and the white, rural voters who make up a key part of his base.
And while the president is pushing forward priorities he thinks will help Republicans in the midterms — like passing the elections-focused SAVE America Act, which the White House and some of its allies see as a key tool to mobilize the MAGA base — other Republicans aren’t convinced voters care about anything other than high prices.
"The reality is, no voter is talking about the SAVE Act,” said Doug Heye, a Republican strategist. “They know what the cost of lettuce is. They know what the cost of gasoline is. And any minute that Trump spends not talking about that, he’s not helping Republicans, and he’s not helping his own case.”
For weeks, administration officials have pointed to the fact that gas prices under this administration have yet to reach their 2022 levels in an attempt to stave off criticism of the war.
“Gasoline prices look like they peaked about a week or so ago, $1 a gallon cheaper than they peaked during the Biden administration,” Energy Secretary Chris Wright told the Senate Energy and Natural Resources Committee last month in a hearing.
A second senior White House official denied that the White House was deeply concerned about breaking the Biden gas price record. The official said that Trump’s “drill baby drill” agenda was keeping prices lower and that using tools such as the Defense Production Act as well as waivers for domestic shipping requirements and summer gasoline blends was keeping prices lower.
“This is something we've been working on the whole time, even even before the war,” the White House official said. “The president has been very vocal about wanting the price of gas as low as possible, so it's a big part of our mandate from the day we took office.”
Oil prices in recent weeks have been kept in check by a combination of factors, including China scaling back imports, the U.S. tapping its strategic petroleum reserves and global inventories. That has prevented gas prices from rising about the average $4.50 range. But each one of those factors has an expiration date that will soon be reached. China can only cut back on imports for so long, the strategic petroleum reserve drawdown can only sustain its current drawdown level for a limited period of time and global crude inventories are running low.
The possibility of a $5 gallon of gas in the U.S. “can no longer be dismissed,” JP Morgan analysts wrote in a note earlier this month.
Myah Ward and Diana Nerozzi contributed to this report.
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