President Donald Trump stated Wednesday that the Iran war will end immediately after the November midterm elections. Investor Peter Schiff dismissed the claim as a lie, warning it would push oil prices and interest rates higher.

Trump made the comments while traveling to Dallas for the midterm Republican convention. He asserted that Iran is desperate to affect the election outcome, aiming to elect a weak group that would leave the regime alone and allow it to keep its nuclear ambitions.

Market Reaction and Oil Prices

Schiff argued there is basically no chance the war ends prior to the election. He stated this delay should put even more upward pressure on oil prices and interest rates. Trump claimed gasoline prices would drop below $2 a gallon once the war ends, though he noted this would take longer than the midterms to materialize.

Brent crude crossed $100 a barrel this week for the first time since July. At the time of writing, Brent crude futures were at $101.62 a barrel, down 0.26%. WTI crude futures climbed to $96.27 a barrel, higher by 0.23%. Renewed Middle East fighting raised fears of further supply disruptions.

Gasoline prices hit a record $4.15 a gallon over Labor Day weekend. They have since climbed further to $4.22 a gallon Wednesday, according to AAA.

ETF Performance

Oil-related exchange-traded funds saw gains amid the volatility:

The United States Oil Fund (NYSE: USO) gained another 0.42% in extended trading. Benzinga edge rankings indicate the fund has a Momentum score in the 93rd percentile and positive price trends in the short, medium, and long term.

Fed Rate Decision Outlook

Federal Reserve Chair Kevin Warsh is scheduled to announce the interest rate decision on Sept. 16. Markets are currently pricing in a 60.2% probability of a hike versus 39.8% for a hold, according to the CME FedWatch tool.

What the Numbers Show

The divergence between political rhetoric and market pricing is evident. While Trump projects an immediate end to hostilities post-election, market participants are pricing in a majority chance (60.2%) of a rate hike, suggesting skepticism about an imminent resolution or its immediate impact on inflationary pressures from oil.

U.S. President Trump stated that oil prices would drop below $2 per gallon shortly after the election, adding that the decline might take longer than the midterm elections. This prediction contrasts with current market movements driven by geopolitical factors.

Brent and US crude futures settled at their highest levels since May 22. The rise in prices was attributed to escalating tensions in the Middle East, which have raised concerns about global supply.

Market Reaction

The divergence between political rhetoric and market pricing highlights the impact of immediate supply risks on commodity valuations. While the administration projects a significant long-term price reduction, near-term volatility remains elevated due to regional instability.

• Brent and US crude futures reached peak levels since May 22.
• Escalating Middle East tensions are cited as the primary driver for supply concerns.
• President Trump forecasted a price drop to below $2 per gallon, noting a timeline extending beyond the midterms.