Economist and co-founder of Echelon Wealth Partners Peter Schiff has a theory about why the Iran war might not end before the midterms: President Donald Trump needs it as a scapegoat for inflation.
"One reason the Iran war may not end before the midterms is that it gives Trump the perfect scapegoat," Schiff tweeted. "He can blame rising prices on the war and hold out false hope that as soon as the war ends, prices will come crashing down. He can't risk ending the war and prices staying high."
The conflict, which began in February, intensified on Monday when Iran launched missiles at Israel in retaliation for Israeli strikes near Beirut. It was Iran's first direct attack since the April 8 ceasefire, reigniting fears of a broader regional escalation. Diplomatic efforts to restore a ceasefire are still underway, but the situation remains volatile.
Trump told Axios he would urge Israeli Prime Minister Benjamin Netanyahu against another round of strikes, arguing that both sides have already exchanged attacks and diplomacy should take precedence. However, the Israeli military said its Air Force struck Iranian military targets in western and central Iran.
The latest developments are likely to renew concerns that escalating tensions could push oil prices even higher, further increasing costs for businesses and consumers. Schiff argues that the war gives Trump a convenient explanation for rising prices while maintaining hopes that inflation will ease once the conflict ends.
But Schiff warns that an end to the conflict wouldn't necessarily bring lower prices. He contends the war has become a convenient explanation for inflation rather than its primary cause. Trump can offer voters "false hope" that prices will "come crashing down" once the fighting ends, even if broader inflationary pressures remain intact.
Inflation remains a key political issue ahead of the midterms in November. U.S. consumer prices rose 3.8% year-over-year in April, marking the fastest pace since 2023. Schiff suggests that if inflation remains elevated after the war ends, scrutiny could shift toward other factors contributing to higher prices.
"He can't risk ending the war and prices staying high," Schiff said.
The remarks reflect Schiff's broader view that geopolitical events are being used to explain inflation that has deeper economic roots.
