Why Trump fails to talk down oil prices and why markets and Americans are starting to ignore him

(SeaPRwire) –   As the conflict with Iran escalates, President Donald Trump has focused on stabilizing the financial markets, aiming to prevent oil prices from skyrocketing, stock values from collapsing, and interest rates from climbing sharply.

Whenever market indicators have signaled trouble, Trump has rapidly responded with a social media update or a public comment suggesting the war he initiated last month might conclude soon. He has publicly stated that market performance has exceeded his expectations, despite the S&P 500 index falling for five consecutive weeks and the global oil benchmark increasing by approximately 60%.

“I thought oil prices were going to go up higher than they are now,” Trump stated at an investor summit on Friday. “And I thought that we would see a bigger drop in stock. It hasn’t been that bad.”

Regarding the Iran war, the White House has mostly avoided communicating more directly with voters about the economic fallout, opting instead to mitigate potential harm in the financial markets. These markets have experienced significant volatility based on speculation about a ceasefire or further escalation, creating a high-stakes guessing game concerning Trump’s subsequent actions.

On Monday, before U.S. stock markets opened, the Republican president demonstrated the contradictory nature of his messaging. In a social media post, he claimed substantial progress in peace negotiations with Iran, while simultaneously threatening civilian infrastructure like desalination plants if an agreement was not secured “shortly.”

The White House views the stock, energy, and bond markets as an indirect channel to communicate with voters. Trump’s economic strategy relies heavily on low fuel costs, strong returns in 401(k) retirement accounts, and affordable mortgage rates.

However, this approach seems to be losing its effectiveness. The president’s numerous statements have failed to alter the fact that a significant portion of global energy supplies is disrupted by the conflict. A March survey from The Associated Press-NORC Center for Public Affairs Research found that only 38% of U.S. adults approve of his economic management, and just 35% support his handling of the Iran situation.

The president has tried to dictate to markets instead of talking directly to Americans

Gene Sperling, a senior economic adviser in the Clinton, Obama, and Biden administrations, said the public directly links rising pump prices to Trump’s decision to attack Iran. He described attempts at “simplistic jawboning” to influence markets as inadequate for Americans facing gasoline prices exceeding $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 commented. “Instead, you have a strategy of not recognizing or even dismissing people’s economic pain.”

White House press secretary Karoline Leavitt referred to the rising oil prices on Monday as a “short-term fluctuation.”

According to Jeffrey Sonnenfeld, a professor at the Yale School of Management and co-author of “Trump’s Ten Commandments: Strategic Lessons from the Trump Leadership Toolbox,” Trump’s tactic of delivering mixed messages is now backfiring.

“The uncertainty is now soaring,” Sonnenfeld stated. “As the messaging to calm markets with false reassurances is having diminishing credibility in financial markets, so, too, has Trump diminished public confidence.”

Trump’s desire for flexibility on the war limits his ability to offer clarity

Trump has favored maintaining flexibility in his wartime decisions, even though this approach has obscured his stated goals.

At a Cabinet meeting on Thursday, he asserted that Iran was “begging” for a deal while also threatening additional military strikes—maintaining throughout that any economic harm to the U.S. would be temporary.

After markets closed on Friday, he postponed his deadline for Iran to reopen the Strait of Hormuz, a crucial oil shipping lane, stating he would delay bombing Iran’s energy facilities for the time being.

On Monday, Treasury Secretary Scott Bessent told Fox News Channel’s “Fox & Friends” that Iran is permitting some tanker traffic through the Strait of Hormuz and that the “market is well supplied.” He attributed this to countries tapping their strategic petroleum reserves and the lifting of sanctions on Russian and Iranian oil already aboard tankers.

“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 said. “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 under President Biden, said Trump’s messaging strategies “can work temporarily, but they have diminishing returns, over time,” especially when they are not backed by concrete policies and outcomes.

“We saw a lot of the volatile market reactions initially, when he kept announcing these things and then walking them back,” Steele noted. “The market reaction now is just a steady trend upward in prices,” he added, explaining that markets are “not responding to it in the same way anymore.”

Confidence in the economy and Trump is fading without clear results

The University of Michigan’s Index of Consumer Sentiment dropped to a reading of 53.3 in March, its lowest point since December. Joanne Hsu, the director of the surveys, cited financial market volatility following the Iran conflict as a key factor eroding economic confidence among middle and upper-income households.

Hsu mentioned that the survey suggests people do not anticipate the high energy costs and stock market losses to continue, but this outlook could shift if the war “becomes protracted or if higher energy prices pass through to overall inflation.”

Gus Faucher, chief economist at PNC Financial Services, emphasized that low consumer sentiment readings do not necessarily mean a recession is imminent. However, he said that for public confidence to improve, consumers need to witness lower gasoline prices, stable stock markets, and reduced mortgage rates. This, he suggested, would likely require a concrete resolution to the conflict, not just repeated statements from Trump.

“The proof is in the pudding,” Faucher said. “People need to see some substantive improvements before they feel better about conditions.”