WASHINGTON – As the Iran war intensifies, President Donald Trump has prioritized efforts to calm the financial markets — attempting to prevent oil prices from surging, stocks from plummeting, and interest rates from rising dramatically.
When market indicators signal danger, Trump has quickly taken to social media or made statements suggesting the conflict he initiated could soon conclude. He has publicly asserted that the markets are performing better than he anticipated, despite the S&P 500 stock index experiencing a decline over the last five weeks, and the global oil benchmark rising by approximately 60%.
“I thought oil prices were going to go up higher than they are now,” Trump remarked at an investor summit on Friday. “And I thought that we would see a bigger drop in stock. It hasn’t been that bad.”
In light of the Iran conflict, the White House has opted not to aggressively communicate to voters regarding the economic repercussions, instead focusing on mitigating damage in the financial markets, which have been volatile due to speculation over potential ceasefires or escalations in the conflict.
On Monday, prior to the opening of the U.S. stock market, the Republican president exemplified his mixed messaging by posting on social media that significant progress had been made in peace negotiations with Iran while simultaneously threatening civilian infrastructure, such as desalination plants, if a deal wasn’t reached “shortly.”
The administration perceives the stock, energy, and bond markets as conduits to indirectly communicate with voters. Trump has anchored his economic policy on maintaining low fuel prices, robust growth in retirement accounts, and favorable mortgage rates.
However, this strategy seems to be losing its effectiveness, as the president’s various statements have not significantly altered the reality that a considerable portion of the world’s energy supplies is disrupted by the ongoing conflict. According to a March survey from The Associated Press-NORC Center for Public Affairs Research, only 38% of U.S. adults approve of Trump’s handling of the economy, and just 35% support his approach to Iran.
The president’s attempts to direct market behavior rather than engage directly with the American populace have raised concerns.
Gene Sperling, a prominent economic adviser during the administrations of Presidents Clinton, Obama, and Biden, asserted that voters can easily connect rising fuel prices to Trump’s decision to engage militarily with Iran. He criticized the president’s “simplistic jawboning” to the markets, noting that it falls short of addressing the economic pain felt by the public as gasoline prices soar past $4 per gallon nationwide.
“Most advisers would say the president has to speak directly to the American people and fully acknowledge the economic pain that his policy has so directly caused in a short amount of time and make the case for why the national security concerns justify it,” Sperling added. “Instead, you have a strategy of not recognizing or even dismissing people’s economic pain.”
On Monday, White House press secretary Karoline Leavitt referred to the rising oil prices as a “short-term fluctuation.”
However, Trump’s strategy of delivering mixed messages has begun to backfire. Jeffrey Sonnenfeld, a professor at the Yale School of Management and co-author of the book “Trump’s Ten Commandments: Strategic Lessons from the Trump Leadership Toolbox,” commented that the uncertainty surrounding the situation is escalating.
“As the messaging to calm markets with false reassurances is having diminishing credibility in financial markets, so, too, has Trump diminished public confidence,” Sonnenfeld stated.
The president’s desire for flexibility in conducting the war has complicated his ability to provide clear objectives.
During a Cabinet meeting Thursday, Trump claimed that Iran was “begging” for a deal while simultaneously threatening further military action, all the while maintaining that any economic damage to the U.S. would reverse itself.
On Friday, after the markets closed, he extended his deadline for Iran to open the Strait of Hormuz, a vital waterway for oil transportation, stating he would refrain from bombing Iran’s energy facilities for the time being.
Treasury Secretary Scott Bessent mentioned on Fox News Channel’s “Fox & Friends” that Iran was allowing some tankers to pass through the Strait of Hormuz and that the “market is well supplied” due to countries releasing their strategic petroleum reserves and lifting sanctions on Russian and Iranian oil already en route.
“We are seeing more and more ships go through on a daily basis as individual countries cut deals with the Iranian regime for the time being,” Bessent noted. “But over time, the U.S. is going to retake control of the straits, and there will be freedom of navigation, whether it is through U.S. escorts or a multinational escort.”
Graham Steele, a former Treasury official during the Biden administration, remarked that Trump’s messaging strategies “can work temporarily, but they have diminishing returns over time” if they are disconnected from actual policies and results.
“We saw a lot of the volatile market reactions initially when he kept announcing these things and then walking them back,” Steele observed. “The market reaction now is just a steady trend upward in prices,” he added, pointing out that markets are “not responding to it in the same way anymore.”
As confidence in the economy and Trump diminishes without clear results, the University of Michigan’s Index of Consumer Sentiment dropped to a reading of 53.3 in March, the lowest since December. Joanne Hsu, director of the surveys of consumers, attributed the financial market
