Mashadipati: Washington Edition: War costs

Starting Monday, the Washington Edition newsletter will reach subscribers twice a day, every weekday morning and afternoon, featuring reporting and analysis from Bloomberg Government's Jonathan Tamari, Bloomberg's Nancy Cook and Bloomberg Intelligence's Nathan Dean. If you're not already a subscriber, you can sign up here.

Today, senior editor Joe Sobczyk wraps up the latest on the war with Iran.

Surge Pricing

The costs of the US-Israel war with Iran continue to add up.

The price of oil and natural gas spiked after Iranian missiles damaged the world's largest liquefied natural gas plant in Qatar, a retaliatory strike after Israel hit a gas field in Iran.

That drove Brent crude, the international benchmark, as high as $119 a barrel with US crude prices briefly surging above $100 a barrel before easing back somewhat.

The disruption affects the US less than the rest of the world, which is more dependent on natural gas and crude oil from the Middle East. But it's still being felt here.

Even before the latest escalation, gasoline prices in the US were approaching $4 a gallon on average and higher in some states. That has Americans searching for ways to offset suddenly bigger energy bills, as Bloomberg's Casey He and Mark Niquette explain in, "Costco Lines, GasBuddy and Fuel Points: Americans Hunt Cheap Gas."

The tit-for-tat attacks on energy infrastructure prompted President Donald Trump to call for a de-escalation and to rebuke his close ally, Israeli Prime Minister Benjamin Netanyahu, for striking the Iran's giant South Pars gas field.

"I told him, 'don't do that.' And he won't do that," Trump said at the White House today.

The administration has been looking for ways to mitigate the impact of the war, which has largely closed the Strait of Hormuz.

In the latest move, Treasury Secretary Scott Bessent said the US could remove sanctions on Iranian oil already in transit in an effort to lower surging energy prices, Bloomberg's Maria Eloisa Capurro, Alex Longley and Ari Natter report. (The US already has temporarily loosened sanctions on Russian oil.)

Even though Trump said he expects the conflict to end "soon," the Pentagon is preparing to ask Congress for an additional $200 billion to pay for the war, Gregory Korte, Tony Capaccio, Courtney McBride and Roxana Tiron report.

That's far more than the estimated $65 billion the US has spent in security assistance to Ukraine since 2022 and suggests that the administration may be preparing for a drawn out campaign. — Joe Sobczyk

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Don't Miss

Top Justice Department leaders are rallying behind a US attorney's efforts to investigate Federal Reserve Chair Jerome Powell and the White House isn't opposing it, amping up the high-stakes clash with major implications for who will lead the central bank.

The Trump administration is transferring management of the $1.7 trillion federal student loan portfolio from the Department of Education to the Department of the Treasury, the most significant step yet in the White House's efforts to dismantle a cabinet-level agency.

The Chinese founder of the massive router maker facing national security probes by the Trump administration has applied for an expedited visa under the Trump Gold Card program.

The FBI has opened an investigation into former National Counterterrorism Center Director Joe Kent, who resigned because of the Iran war, over alleged unauthorized disclosures of classified information

Mortgage rates rose for a third week, reaching a three-month high of 6.22% for the average 30-year fixed loan, as wartime inflation fears drove up yields for the government bonds that guide home loans.

Sales of new homes fell by more than expected in January to the lowest since 2022, reflecting a pullback in buyer demand across the country.

Applications for unemployment benefits in the US fell last week to the lowest level since January, adding to evidence of limited layoffs.

Wall Street lending giants would get relaxed capital requirements under proposals unveiled by the Federal Reserve, in a move that could potentially unleash billions of dollars for lending, share buybacks and dividends.

Trump's pick to lead the Department of Homeland Security advanced through a Senate committee despite opposition from the panel's chair, Rand Paul, who argued nominee Markwayne Mullin's "anger issues" made him unfit.

Watch & Listen

Today on Bloomberg Television's Balance of Power early edition at 1 p.m., hosts Joe Mathieu and Kailey Leinz interviewed Democratic Representative Sam Liccardo of California about the economic impact of the war with Iran and Congress' role.

On the program at 5 p.m., they talk with former Defense Secretary Leon Panetta about the cost of the war and the US relationship with Israel.

On the Trumponomics podcast, host Stephanie Flanders speaks with with Nobel Prize–winning economist Daron Acemoglu to unpack one of the most urgent questions facing the global economy: how is artificial intelligence changing the future of work, and what are the potentially dire consequences for society and democracy? Listen on Apple Podcasts, Spotify or wherever you get your podcasts.

Chart of the Day

Driven by stock market gains, total household wealth in the US rose by nearly $15 trillion last year after a fourth quarter gain of $2.2 trillion, a Federal Reserve report showed Thursday. The value of Americans' equity holdings increased $1.6 trillion last quarter and are up by more then $10 trillion over the year. Stock market wealth is concentrated among wealthier households that hold more equities. For the middle class, who tend to hold more wealth in real estate, the gains were more tepid. The Fed's report showed the value of household real estate holdings fell roughly $350 billion last quarter, reflecting a sluggish housing market, but is still up $1.1 trillion in 2025. — Alex Tanzi

What's Next

Construction spending in the US for January will be reported Monday.

Import and export prices in February will be released Wednesday.

The University of Michigan's index of consumer sentiment in March will be published March 27.

Seen Elsewhere

Unidentified drones have been detected above the Army base in Washington where Secretary of State Marco Rubio and Defense Secretary Pete Hegseth are living, the Washington Post reports.
Almost 10% of Americans who where enrolled in Affordable Care Act plans last year have dropped health insurance after the end of federal subsidies raised premium payments, the Wall Street Journal reports.
Trump has championed combating fraud in government programs, but he's granted clemency to more than 70 allies, donors and others convicted in fraud cases over both of his terms, the New York Times reports.