$4 Gas Returns, Feels Worse Than 2022
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- Gas prices hit $4 a gallon this week, the first time since 2022 when they averaged $5; they previously hit $4 in 2008 in the lead-up to the global financial crisis.
- Trump's handling of gas prices drew 66% disapproval and just 27% approval in a Yahoo/YouGov survey, while a separate Reuters/Ipsos poll found 21% of U.S. households said rising gas prices affected their finances "a great deal."
- Oil prices posted their largest monthly percentage gain on record, with global benchmark Brent crude trading near $120 a barrel and West Texas Intermediate climbing above $100 a barrel for the first time since mid-2022.
- Consumer sentiment split sharply: the Conference Board index rose to 91.8 in March from 91, beating Wall Street Journal forecasts of 87.5, while the University of Michigan survey recorded a 6% drop over the same period.
- Americans are in a more vulnerable position than in 2022, having spent down the savings they emerged from COVID with; the labor market is now characterized as "low-hire, low-fire" by the St. Louis Fed.
- Simon Massabni, head of business development at multi-asset broker XS, warned of a "low-growth, high-inflation" environment and expects the S&P 500 to remain volatile with limited upside and swift corrections.
- Trump said Tuesday the U.S. could end the war in Iran in two to three weeks; if the Strait of Hormuz reopens, roughly one-fifth of the world's oil and liquefied petroleum could resume flowing through it.
Why it matters: The 2022 gas shock hit Americans who still had pandemic savings and a hot labor market behind them; this time those buffers are gone, and the Fed faces a stagflation-like environment where higher energy costs make rate cuts harder to justify. A prolonged Iran war — even one Trump says could end in weeks — would hit consumers with far less cushion than last time.
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