The Nov. 3 midterm elections are looking more and more like a referendum on the disastrous performance of President Donald Trump, who has plunged the nation deeper in debt and into an endless war that is causing prices to rise beyond the means of most working-class consumers, who have already been battered by inflation and lagging wages.

The Federal Reserve raised its benchmark interest rate by a quarter point Wednesday to a range of 3.75 percent to 4 percent, delivering an anti-inflation jolt to an economy already strained by a six-month war with Iran, record fuel costs and a national debt that has eclipsed $40 trillion.

The timing, seven weeks before the pivotal midterm elections, complicates an already difficult environment for Republican candidates defending narrow majorities in Congress.

The Fed’s unanimous decision marks its first rate increase since July 2023 and reflects a central bank determined to combat inflation that has remained stubbornly above its 2 percent target for more than five years. The consumer price index rose 3.4 percent in August from a year earlier, with gasoline prices surging 27.4 percent over the same period.

“Inflation remains elevated,” the Federal Open Market Committee said in a statement, adding that the move “will support a timelier return to the Committee’s 2 percent goal”.

Canada implemented retaliatory tariffs of 15%, 25%, and 50% on approximately $20 billion worth of U.S. exports effective September 8, 2026, matching U.S. duties dollar-for-dollar after Trump blew up negotiations with last-minute changes to the terms on vehicles and auto parts, triggering a severe cross-border trade war.

A war without end

The rate hike lands amid a conflict with Iran that the White House said would last weeks but has now entered its seventh month. The House voted 220-204 on Tuesday to pass a war powers resolution directing President Donald Trump to remove U.S. forces from hostilities — the third such rebuke from the chamber.

Seven Republicans joined Democrats in supporting the measure. Rep. Zach Nunn of Iowa said in a statement that “with the negotiating window closed, sustained combat operations now require congressional authorization,” adding, “I will not support another open-ended war”.

The Congressional Budget Office reported Tuesday that the war has cost $38 billion and is rising by $3 billion per month.

Rep. Gregory Meeks, the ranking Democrat on the House Foreign Affairs Committee, cited “higher gas prices and mortgage rates, inflation, billions of dollars in government spending, and U.S. military casualties” as the conflict’s toll.

Nineteen U.S. service members have been killed and more than 750 wounded since strikes began Feb. 28. Newly obtained images show destroyed buildings, vehicles and aircraft as a Pentagon watchdog estimated that Iranian missile and drone attacks caused equipment losses valued up to $3.7 billion, including nearly 60 aircraft.

In a mandatory report to Congress, the Defense Department’s inspector general said US Central Command reported Iranian strikes on US bases in Kuwait, Bahrain, Qatar, the United Arab Emirates, Saudi Arabia, Iraq, Oman and Jordan.

“This is major damage to our bases that hasn’t been communicated to the American public,” said one deployed active-duty service member speaking with journalists on the condition of anonymity. “We’re standing there with our eyes closed getting punched in the face.”

Vice President JD Vance told reporters earlier this month that the conflict is “not a war” and declined to offer a timeline for its conclusion, saying, “When will the Iranians stop shooting at ships? I think the reality is I don’t know the answer to that question”.

Trump, who launched the unprovoked war in February without authorization from Congress, told reporters during a visit to Ireland on Sunday that he expects the war to end “right after the midterms,” adding that “gasoline’s going to drop like a rock”.

Pain at the pump

Drivers are already paying record prices for this time of year. The national average for regular gasoline stood at $4.22 per gallon this week, the highest ever recorded for September, while diesel averaged $5.94 and was approaching $6. In California, diesel prices were nearing $8 per gallon.

The gasoline price increases trace directly to the conflict. Iranian disruptions to shipping in the Strait of Hormuz, combined with Ukrainian strikes on Russian refining capacity and Houthi attacks on Saudi infrastructure, have pushed Brent crude above $100 per barrel.

An analysis by Brown University’s Watson Institute found that U.S. consumers are bearing an additional $100 billion in energy costs — roughly $1 million every two minutes — since the war began, amounting to about $760 per household.

Diesel’s surge is particularly concerning because it powers trucking, farming and deliveries, meaning higher costs will filter into the price of goods across the economy.

Disruptions in the Strait of Hormuz and the Red Sea are affecting global shipping, forcing more energy shipments onto longer, less efficient alternate routes.

With tanker traffic crippled through the Middle East’s main oil and LNG export hub, the Panama Canal and Suez Canal have experienced a boost in energy commodity cargo movement.

Access costs for the Panama Canal have skyrocketed, with auction slots hitting a record $5.3 million and wait times stretching to 17 days due to high demand and reduced transit capacity.

$40 trillion in debt and climbing

Few candidates on the campaign trail are talking about what should be done about the nation’s mounting debt, which surpassed $40 trillion for the first time last month, according to Treasury Department data.

The Republican president is responsible for more than a quarter of the debt. The debt has grown by approximately $11.6 trillion during Trump’s two terms, driven by tax cuts, pandemic borrowing and rising interest costs.

The Fed’s rate hike makes that debt more expensive to service. As short-term Treasury bills mature and are refinanced at higher rates, interest payments — already the third-largest federal expense — will consume a growing share of the budget. Interest on the national debt is surpassing defense spending, and it is projected to overtake Medicare by 2028.

The nonpartisan Committee for a Responsible Federal Budget estimated Trump’s first-term tax cuts added $8.4 trillion to the debt, while his second-term tax and immigration law added another $4.7 trillion, according to the Congressional Budget Office.

It was only sixteen years ago that the Tea Party took the country by storm pledging to tame the federal deficit when the national debt stood at $14 trillion.

President Barack Obama and a Republican-controlled Congress slowed the growth of discretionary federal spending; the national debt has doubled since Trump entered the White House on January 20, 2017.

Today, the rising tide of government red ink barely gets a mention in a public debate dominated by gas prices, data centers, artificial intelligence, and bizarre Republican claims that the Democratic Party has gone communist, turning boys into girls, and mostly focused on catering to immigrants who are eating America’s cats and dogs.

Trump recently promised that —after the midterms— he will send a $5000 payoff for every adult if Republicans maintain their majorities in Congress, a lie that has no more credibility than his unfulfilled $5000 DOGE dividends and $2000 tariff rebates.

Trump said the rationale behind the proposal was the country’s “tremendous economic success,” saying the U.S. “is making so much money.” But the proposed $5,000 payments would cost about $1.2 trillion — an enormous new expenditure for a federal government already carrying more than $40 trillion in debt.

The $5,000 “DOGE dividend” was a proposed 2025 payout floated by Trump and Elon Musk, intended to distribute savings from the Department of Government Efficiency directly to Americans. The initiative fell short of its $2 trillion savings target, failing to generate a central cash pool.

In November 2025, Trump promised Americans $2,000 each from the “trillions of dollars” in tariff revenue he claimed his administration collected.

“People that are against Tariffs are FOOLS!,” Trump said in a Nov. 9, 2025, Truth Social post. “We are taking in Trillions of Dollars and will soon begin paying down our ENORMOUS DEBT, $37 Trillion. Record Investment in the USA, plants and factories going up all over the place. A dividend of at least $2000 a person (not including high income people!) will be paid to everyone.”

The U.S. Supreme Court ruled 6-3 on February 20, 2026, that President Trump’s sweeping tariffs under a 1977 emergency law were illegal. Chief Justice John Roberts wrote that the International Emergency Economic Powers Act (IEEPA) does not give the president the power to levy taxes or tariffs, a power reserved for Congress.

Midterm stakes

The confluence of war, inflation and debt has dragged down Trump’s approval ratings and endangered Republican prospects in November, when control of both chambers of Congress is at stake.

Delaware held the final state primary Tuesday, with Sen. Chris Coons easily winning the Democratic nomination as he seeks reelection. The general election is Nov. 3.

Fed Chair Kevin Warsh, who took office in May, has emphasized his commitment to price stability even as Trump has repeatedly called for lower rates to stimulate growth. The central bank’s independence will face further scrutiny as the election approaches.

The Fed’s next policy meeting is scheduled for November, after voters have cast their ballots.

Perhaps nobody wishes he could pull a disappearing act as much as New Jersey’s Congressman Tom Kean Jr., the most vulnerable Republican incumbent in the nation.

Kean, 57, is running for a third term in a district that is almost certainly sending a Democrat to replace him in November’s midterm elections.

He missed more than 140 votes while hospitalized nearly four months after suffering a nervous breakdown and voting to strip health care and food assistance from millions of Americans to finance massive tax cuts for billionaires and corporations.

Although he went several weeks without being missed on Capitol Hill, Kean is dependent on dark money for his campaign that indelibly associates him with Trump and South African immigrant trillionaire Elon Musk.

For months, Trump dismissed concerns about the political fallout of the ill-fated war, notionh that the party in power always loses the midterms, and saying voters’ economic frustration wouldn’t sway him.

“I don’t think about Americans’ financial situation. I don’t think about anybody. I think about one thing,” Trump said in May, when asked whether pocketbook concerns would push him toward a deal with Iran. “We cannot let Iran have a nuclear weapon, that’s all. That’s the only thing that motivates me.”

American intelligence agencies repeatedly concluded that Iran did not have a nuclear weapon, and was not trying to build one. A 2007 National Intelligence Estimate released by all 16 U.S. spy agencies concluded that Iran halted its secret nuclear weapons program in 2003.

Tulsi Gabbard left no doubt when she testified to Congress last year about Iran’s nuclear program.

The director of national intelligence told lawmakers Iran was not building a bomb, and its supreme leader had not reauthorized the weapons program he suspended in 2003, despite enriching uranium to unprecedented levels.

“The intelligence community continues to assess that Iran is not building a nuclear weapon,” Gabbard said in March 2025, adding that Iran’s enriched uranium stockpile was “at its highest levels and is unprecedented for a state without nuclear weapons.”

Despite thaassessment, Trump joined Israeli Prime Minister Benjamin Netanyahu and committed America’s military to the unprovoked misadventure, which sent prices soaring and fractured his base of support.

Trump still insists voters have no reason to be disillusioned with his inept job performance.

At a North Carolina rally on Wednesday, he acknowledged that Americans are paying higher gas prices because of the war—then argued the cost was worth it.

“It’s a very inexpensive price to pay for what we’ve done,” Trump said.

Perhaps Trump is only willing to say that because Tom Kean Jr. is the one who is likely to pay the price.