Iran War Has Cost U.S. Households $100 Billion, Moody’s Says

Fortune reported Monday that the U.S.-Iran conflict has inflicted roughly $100 billion in costs on American families. The figure comes from Moody’s Analytics, which tallied the combined drag of elevated military expenditure and oil-driven price increases.

Moody’s Breaks Down the Iran War Household Cost

Moody’s Analytics chief economist Mark Zandi put the per-household burden at approximately $750. He attributed the damage to two channels: a surge in Pentagon outlays and disrupted Middle Eastern oil supply that pushed energy prices sharply higher. Brent crude has breached $110 a barrel on multiple occasions since hostilities began. The Defense Department told Congress in late April that military operations had already consumed $25 billion, the bulk of it spent on munitions.

Zandi noted that deficit-financed tax cuts initially cushioned the blow for consumers. But as of mid-May, larger refund checks no longer covered the extra expense at the fuel pump. The pressure is now building fastest on middle- and lower-income households, he warned.

Also Read: Oil Tops $110 as Middle East Conflict Widens

Wall Street Firms Confirm the Math

Goldman Sachs and Morgan Stanley reached similar conclusions through independent analysis. Goldman estimated that higher gasoline prices represented roughly $140 billion in annualized headwind to household incomes as of mid-April. Morgan Stanley calculated that a sustained 15% rise in fuel costs is enough to fully erase the average tax refund bump. Gasoline prices have risen approximately 40%, well past that threshold.

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A K-Shaped Squeeze With No Savings Buffer

Bank of America’s most recent consumer spending data sharpened the picture further. Spending gaps between higher- and lower-income households were widest in large discretionary categories such as travel. The bank attributed the pullback partly to uncertainty around wages and fuel costs, and partly to fading tax refund benefits that were already smaller for lower earners. With the personal savings rate near historic lows, Zandi said consumers have little room to absorb further pressure. Unless energy prices retreat, spending retrenchment appears increasingly likely.

The pattern reinforces the broader K-shaped dynamic defining this economic cycle. Wealthier households retain flexibility. Those at the lower end face hard choices with almost no financial cushion left.

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