First Six Days of Iran War Cost More Than $11.3 Billion: Report

President Trump headed to Cincinnati, Ohio, and Hebron, Kentucky, today, looking to tout the economy as well as his tax cuts, prescription drug pricing policies and other wins he claims to have notched over the past year. Trump made his economic pitch even as gas prices continue to rise as a result of the Iran war, now in its 12th day. "We'll be back on track in a pretty short while," Trump said. "Prices are coming down very substantially. Oil will be coming down." He called the price surges "just a matter of war" and said they were "probably less than I thought."

Pentagon Says First Six Days of Iran War Cost More Than $11.3 Billion: Report

Pentagon officials reportedly told congressional lawmakers Tuesday that the first six days of the war with Iran cost more than $11.3 billion.

The New York Times reports that the estimate, delivered at a closed-door briefing on Capitol Hill, is the most comprehensive calculation of the early cost of the military effort - but still "omitted several aspects of the operation," such as the buildup in the Persian Gulf region before the first strikes. "For that reason, lawmakers expect the number to grow considerably as the Pentagon continues to calculate the costs that accumulated just in the first week," the Times's Catie Edmondson writes.

Earlier reports said that Defense Department officials had told lawmakers that the military used $5.6 billion worth of munitions in just the first two days of the war.

The preliminary cost assessments come as the Trump administration is still widely expected to request that Congress provide a supplemental funding package totaling $50 billion or more. President Trump has also said he wants Congress to deliver a massive $500 billion boost to the annual defense budget, raising it to $1.5 trillion.

Countries Agree to Largest-Ever Release of Oil Reserves

The International Energy Agency announced Wednesday that it will release 400 million barrels of oil from emergency reserves to address supply shocks resulting from the war in the Middle East.

The IEA - an intergovernmental organization based in Paris that provides policy analysis and advice for its 32 member nations, with the goal of maintaining energy security - did not provide a timeline for the release. Member nations, which include the U.S. and most of Europe, are required to hold 90 days' worth of oil supplies, roughly 1.2 billion barrels, which the IEA can release during times of crisis to stabilize world markets. The organization has made emergency releases a handful of times since its founding in 1974, including during the Gulf War in 1991 and in response to hurricanes in the Gulf of Mexico in 2005.

"This is a major action aiming to alleviate the immediate impacts of the disruption in markets," said Fatih Birol, IEA's executive director, per the Associated Press. "But, to be clear, the most important thing for a return to stable flows of oil and gas is the resumption of transit through the Strait of Hormuz."

In response to an attack by the U.S. and Israel 12 days ago, Iran has targeted energy infrastructure throughout the Persian Gulf and attacked shipping across the region. IEA estimates that global energy supplies are about 20% lower than before the war began, with Asian nations in particular feeling the pinch from a loss of natural gas shipments.

Following the IEA's announcement, President Trump said the U.S. would release supplies of oil from the U.S. Strategic Petroleum Reserve, though he suggested that the initial release would be small and it wasn't clear if he would coordinate with IEA on the release. The U.S. reserve currently holds about 415 million barrels of oil, well below its maximum level of 714 million barrels.

"We'll do that, and then we'll fill it up," Trump said during an interview in Ohio. "I filled it up once, and I'll fill it up again, but right now, we'll reduce it a little bit, and that brings the prices down."

Some analysts say the reserve release will have only a modest effect on prices, with little improvement to be expected until the underlying problem is solved. Neil Crosby of the commodities analytics firm Sparta said the IEA release will be "a little Band-Aid" overall. "This scenario was always written off by large parts of the industry: In case we get to the scenario of where there's a war with Iran, the U.S. Navy will ensure that Hormuz doesn't stay closed," he told the Associated Press. "And then we got there, and it's closed. ... It's a complete disaster."

Inflation Holds Steady in February, but Iran War Price Hikes Are on the Horizon

The Consumer Price Index rose 0.3% on a monthly basis in February, the Bureau of Labor Statistics reported Wednesday. On an annual basis, the popular measure of inflation rose 2.4%, the same as in January, and both the monthly and annual readings matched analysts' expectations.

Core CPI, which excludes volatile food and fuel prices, also held steady on an annual basis, coming in at 2.5%, matching a five-year low. On a monthly basis, core CPI rose 0.2%, below the 0.3% increase seen in January.

Although still running above the Federal Reserve's 2% target, the inflation rate in February does little to contradict the idea that the central bank continues to make progress in its effort to control inflationary pressure. However, the February data was collected before the war with Iran, which has sent energy prices soaring, with effects that could show up in the March data.

Elizabeth Renter, senior economist at NerdWallet, said the risk of higher inflation is increasing. "The longer the conflict continues, the greater the risk of it pushing overall inflation upward," she said in a note, per Bloomberg. "Next month, we'll certainly see it in energy price growth, but higher gas prices can cause other categories to grow more expensive too."

Quote of the Day

"Although both sides claim to be concerned about our dire fiscal situation, neither side - and let me emphasize that, neither side - has demonstrated a genuine desire to seriously address it. Democrats insist the solution is simply making the rich pay their fair share. Yet when they had the power to do so, they didn't. Republicans respond that we don't have a revenue problem, we have a spending problem. Yet when we have the power to return spending to a reasonable pre-pandemic level, the One Big Beautiful Bill simply did not meet the moment."

− Republican Sen. Ron Johnson of Wisconsin, a fiscal hawk, in his opening remarks at a Wednesday hearing of the Senate Finance Committee's Subcommittee on Fiscal Responsibility and Economic Growth.

Sen. Tina Smith of Minnesota, the top Democrat on the subcommittee, noted that net interest costs are the federal government's fastest-growing expense and are projected to double to more than $2 trillion a year over the coming decade. "So that is a lot of money leaving the treasury with no meaningful improvement to people's lives," she said.

Congressional Budget Office Director Phillip Swagel testified that the Trump administration's termination of the tariffs that the Supreme Court recently ruled unconstitutional dramatically affects the deficit outlook: "This termination results in projected deficits that are $2 trillion larger over the 2026-36 period than in our baseline projections last month."

Swagel said updated projections based on Trump's new tariffs would be provided once those tariffs are more set in place.

Fiscal News Roundup

• Trump Talks Drug Prices in Ohio, Campaigns Against Massie in Kentucky as Iran Looms Large – Associated Press
• Republicans Block Democratic Bill to Fund DHS Agencies Other Than ICE, CBP – The Hill
• Record 400 Million Barrels of Oil to Be Released From Emergency Reserves – Bloomberg
• Trump Will Tap Oil Reserve as Iran War Drives Up Gas Prices – Axios
• Trump Keeps Telling America He's Winning in Iran. He's Less Clear in Explaining How the War Ends – Associated Press
• Trump's War on Iran Creates an Economic Storm for Consumers and the Fed – NBC News
• Trump Tells Axios There's "Practically Nothing Left" to Target in Iran – Axios
• Pentagon Tells Congress First Week of Iran War Cost More Than $11.3 Billion – New York Times
• Tillis Says DOJ Probe of Powell 'Reaching the Point of the Absurd' – Politico
• Democratic Senators Hatch Plans to End Income Taxes for Millions of Americans – Wall Street Journal
• Some States Are Reviving a Push to Tax the Rich – Associated Press
• Raise Taxes on the Rich? These Rich New Yorkers Are All for It – New York Times
• Trump Has One Prescription for Midterms. House Republicans Have Another – Associated Press
• The Contracting Mess Noem's Leaving Behind at DHS – Axios
• The Boom in Autism Therapy Is Medicaid's Fastest-Growing Jackpot – Wall Street Journal

Views and Analysis

• This War With Iran Will Cost More Than We Can Afford – Timothy Noah, New Republic
• The White House Isn't Panicking About Oil Prices. That May Change in a Few Weeks – Megan Messerly and Nahal Toosi, Politico
• Trump Can't TACO Out of the Iran War's Oil Price Shock – David Goldman, CNN
• Why Voters Might Finally Blame Trump for Rising Costs – Catherine Rampell and Stephen Stromberg, New York Times
• Here's One Boast Trump Won't Be Making Any More – Natash Sarin, New York Times
• How Trump and His Advisers Miscalculated Iran's Response to War – Mark Mazzetti, Tyler Pager and Edward Wong, New York Times
• Analysis: Iran War Becomes a Contest of Who Can Take the Most Pain – Jon Gambrell, Associated Press
• Thune Is in a Vise as Trump and Far Right Demand Fight on Voter Bill – Carl Hulse, New York Times