Iran War Has Cost Americans Nearly $2,000 Per Household, Says Mark Zandi—Higher Fuel Prices and Borrowing Costs Are Driving the Economic Pain

Economist Mark Zandi on Monday shared his estimates of the Iran war’s impact on ordinary Americans, warning that high energy costs, as well as military spending and high interest rates, were among the biggest contributing factors to higher spending.

Mark Zandi Outlines Iran War Toll on America’s Bills

In a thread on the social media platform X, Zandi said that his calculations suggested that American household costs had ballooned to nearly $2,000 since the Iran war kicked off in February. “Nationwide, that adds up to $265 billion,” Zandi said in the thread, citing data from Moody’s Analytics.

Nearly $2,000. By my calculation, that is what the Iran war has cost the average American household since the war began nearly eight months ago. Nationwide, that adds up to $265 billion. pic.twitter.com/fN2hGiHR6t

— Mark Zandi (@Markzandi) October 12, 2026

Energy Costs Soar

In the same thread, “higher energy prices” were the biggest contributing factor to household spending. “A gallon of regular goes for $4.37, up from just under $3 before the war. Diesel is above $6, and jet fuel has nearly doubled,” Zandi said. He added that home heating fuel prices were adding to the costs.

It’s worth noting that the national average price of gas fell by 40 cents on Monday, but GasBuddy analyst Patrick De Haan warned that the decline may not last.

“Altogether, that comes to close to $1,100 per household, paid at the pump and in the higher cost of everything that moves by truck or plane,” Zandi said. He added that the Energy tab continued to add $50 per week at current fuel costs.

Last week, Sen. Rand Paul (R-KY) warned that the war in Iran was contributing to higher energy bills for ordinary Americans. The Kentucky Senator also said that climate mandates added to the costs.

Altogether, that comes to close to $1,100 per household, paid at the pump and in the higher cost of everything that moves by truck or plane. And the energy tab continues to increase by about $50 a week at today’s fuel prices. pic.twitter.com/wJslPRYPMY

— Mark Zandi (@Markzandi) October 12, 2026

Fed Rate Hike

“The war’s inflation contributed to the Fed’s decision last month to raise rates and signal that more rate increases are coming,” Zandi said in the thread, following the Federal Reserve Chair Kevin Warsh‘s decision to hike the interest rates by 25 basis points to 3.75% to 4.00%.

Mortgage costs had surged to 7.5% following the decision to hike rates. “By our reckoning, the higher rates have cost the economy about $540 per household,” he said.

Then there are the higher interest rates. The war’s inflation contributed to the Fed’s decision last month to raise rates and signal that more rate increases are coming. Long-term rates are also up a lot – fixed mortgage rates have climbed from below 6% before the war to 7.5%. By…

— Mark Zandi (@Markzandi) October 12, 2026

Military Spending

Zandi also pointed to the military costs adding $360 per household. “The war’s costs taken together have absorbed about half the average American household’s income gain over the past eight months,” he said, adding that these factors combined illustrated why the war was unpopular among people.

Notably, Secretary of War Pete Hegseth, in August, pushed for Congress to approve a historic $1.5 trillion military spending budget, as the Secretary said that the Iran war had added over $37 billion in additional costs back in July.

Consider that the war’s costs taken together have absorbed about half the average American household’s income gain over the past eight months. No wonder the war is so unpopular.

— Mark Zandi (@Markzandi) October 12, 2026

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