TEHRAN – According to information published by Bloomberg, the ongoing conflict involving Iran is sending shockwaves through American financial markets. Top economic experts warn that the Federal Reserve may be forced into a sharp series of interest rate hikes to combat resurgent inflationary pressures.

Bloomberg’s analysis indicates that the financial fallout from the war now extends well beyond simple fuel price spikes. Mark Zandi, chief economist at Moody’s Analytics, pointed to a key warning signal: the yield on the 10-year US Treasury note has climbed to 4.6%. In an analysis shared on social media platform X, Zandi described this movement as a clear reflection of a rapidly deteriorating economic outlook.

Zandi emphasized that the conflict is directly inflating public expectations of future price increases. He noted that uncontrolled inflation expectations are the Federal Reserve’s greatest fear, as they lead to permanently higher prices. The economist warned that policymakers will likely continue tightening credit conditions—regardless of the broader economic pain—until those expectations cool down. Zandi compared inaction to letting cancer metastasize throughout the economy, requiring even more drastic rate hikes later.

Meanwhile, veteran market analyst Ed Yardeni told CNBC that recent Consumer Price Index (CPI) and Producer Price Index (PPI) readings show the Fed is already "behind the curve." Bloomberg’s report cites Yardeni predicting that the central bank will abandon any talk of rate cuts at its June meeting and shift toward a "tightening bias," followed by a quarter-point hike in July. He pointed to the 4.1% yield on two-year Treasuries as evidence that bond markets are demanding higher rates.

The economic damage is also hitting American households directly in their wallets. Citing a study from Brown University’s Watson Institute, Bloomberg notes that US consumers have paid over $40 billion in extra fuel costs since the start of Donald Trump's confrontations with Iran. That figure—$41.5 billion as of last Sunday—averages $316 per household, enough money to rebuild the nation’s bridges or modernize its air traffic control system.

In conclusion, the repercussions of the Iran conflict are pushing US inflation to its highest level since the 2022 Ukraine invasion, creating a growing political headache for Trump while keeping Wall Street on edge.