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Congressional Republicans had been hoping their political standing would improve this spring when American voters received larger refunds thanks to changes in US tax law made under the One Big Beautiful Bill Act.

However, The Financial Times reported on Tuesday that much of the projected fiscal stimulus from the larger refunds has already been swallowed up by the rise in gas and energy prices caused by President Donald Trump’s illegal war with Iran, and the financial situation could grow even worse in the coming months.

Gregory Daco, chief economist at EY Parthenon, told The Financial Times that “the tax refunds have been largely erased by the increase in Middle East price pressures,” and warned that “the longer the conflict lasts, the more we move to an adverse scenario where inflation proves more persistent and erodes consumer spending growth.”

Nathan Sheets, global chief economist at Citigroup, told The Financial Times that the Iran war has........

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