WASHINGTON — The war with Iran is driving up inflation, and borrowing costs may increase for Americans, according to a new report released Tuesday by the Congressional Budget Office.
\n\nThe report found the war was responsible for more than one-third of the increase in inflation this year, and inflation will likely continue to grow in the first quarter of next year. The CBO specifically blames the war for more than 40% of inflation during the second quarter of 2026 and an estimated half a percentage point of higher inflation during the first quarter of 2027. Interest rates are likely to rise as a result, making borrowing costlier, the report found.
\n\nInterest rates are likely to keep rising as a result, making borrowing more costly, the report found. The rate on the typical 30-year mortgage was under 6% before the war started; it was at 7.22% on Tuesday, according to Mortgage News Daily. Wall Street, likewise, expects the Federal Reserve to raise its key interest rate Wednesday in a bid to tamp down inflation.
\n\nThe main driver of increased inflation is fewer oil and natural gas shipments through the Strait of Hormuz and the Red Sea, the CBO report says. The…
Original source: https://www.nbcnews.com/