CSPAN - Washington Journal Heather Long
Aired: 2026-03-14
Duration: 18:59


=== Gas Prices and Inflation (15:03) ===

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[00:00:37]  Welcome back.
[00:00:38]  Joining us now to talk about the potential impact on the economy because of the efforts in Iran as Navy Federal Credit Union Chief Economist Heather Long.
[00:00:47]  Heather, thanks so much for being with us.
[00:00:49]  Yeah, glad to be here.
[00:00:50]  Good morning.
[00:00:50]  Okay, there's a lot to talk about.
[00:00:52]  First, let's talk about energy prices.
[00:00:54]  How concerning is the shock to energy prices we're seeing?
[00:00:59]  Obviously, it's not as bad as 2022, but the highest Americans have seen with President Trump back in office.
[00:01:06]  Yeah, definitely.
[00:01:06]  I mean, it's not as bad yet, but it looks like we have a very good chance of hitting a $4 a gallon average on gas, and we're almost back to $5 diesel.
[00:01:18]  The truckers are really feeling this already right now.
[00:01:22]  And so you pointed, as you've pointed out, this is the highest ever under President Trump.
[00:01:26]  It's up over 75 cents already for most Americans compared to a month ago.
[00:01:32]  And this is already having a drag on the economy.
[00:01:35]  And I don't fear a recession in the United States, but I do think it's going to be one more example of the middle-class and moderate-income Americans feeling a squeeze here.
[00:01:47]  They just got these larger tax refunds, and instead of being able to spend them on a nicer summer vacation or a little splurge, all that money is going to the pump and the higher gas prices and probably higher food prices that are coming our way.
[00:02:03]  Yeah, one thing when I talk to White House officials, they talk about in the past is how low the president has been able to get those gas prices down, really hanging their hat on that.
[00:02:11]  But I wonder, you talked a little bit about the wider effect.
[00:02:15]  If oil supply disruption continues, could we see effects trickle down into other aspects of the economy beyond just gas prices?
[00:02:24]  Yes, for sure.
[00:02:25]  And that's where you get nervous that you could really see a slowdown across the economy.
[00:02:30]  And this was supposed to be a hot economic year with stronger than normal growth.
[00:02:34]  And now we're talking about revising that down to weaker than normal growth this year.
[00:02:40]  And the very reason that you are talking about, which is this isn't just about the prices at the pump, which are having an impact, but of course, oil and some of its uses, they go into everything from plastics that are used in so much of manufacturing.
[00:02:55]  Also, the Strait of Ormuz, as many of us are learning, plays a critical role in the fertilizer supply that's going on for planting season right now in the United States and around the world.
[00:03:06]  And then as I was learning myself in the last week, things like sulfur are very much transiting through that strait.
[00:03:14]  And sulfur is not only in fertilizer, but also a key component in these AI chips that are so coveted right now.
[00:03:21]  So that it's going to and already starting to spill through many, many parts of the economy.
[00:03:27]  I really worry about the manufacturing sector.
[00:03:29]  It feels like one more blow after all those tariffs that they're already dealing with.
[00:03:34]  And we're seeing a global response to some of these higher oil prices.
[00:03:39]  Just this week, the IEA said it would release the largest amount of oil ever from the Global Strategies Reserve, 400 million barrels, in an attempt to prevent supply chain disruptions.
[00:03:53]  President Trump said that he would release about $200 million from the strategic reserves that the U.S. has.
[00:04:02]  Take a listen now to Energy Secretary Chris Wright talking about the global response to oil.
[00:04:08]  Disruption of oil, temporary disruption of oil through the Straits of Hormuz, that's what the Strategic Petroleum Reserve is for.
[00:04:16]  So as we have a shortage of market coming through that avenue, we're going to bring oil to market through other avenues to get through a few weeks of a short-term dislocation to get to a much better place on the other side.
[00:04:29]  Of course, this is in coordination with 30 countries.
[00:04:33]  The real issue right now is Asian refineries.
[00:04:35]  That's where oil coming out of the Gulf goes to.
[00:04:39]  So Japan is releasing at a much higher relative rate to their imports.
[00:04:43]  It's the Asian refineries that we want to keep running and tamp down the price of oil to the extent we can through this few weeks crisis.
[00:04:51]  President Trump's thinking long term.
[00:04:53]  He's not thinking about next month.
[00:04:55]  He's thinking about what's best for the American people, what's best for the American economy, and what brings safety to our troops in the region and brings prosperity to the Middle East.
[00:05:06]  That was Energy Secretary Chris Wright talking about some of those global releases of oil.
[00:05:11]  How helpful can this be?
[00:05:12]  Yeah, let's do a little math.
[00:05:14]  I know it's Saturday morning, but so.
[00:05:16]  Wake up, people.
[00:05:18]  So every day in the world, we consume 100 million barrels of oil around the globe.
[00:05:24]  So remember that 100.
[00:05:25]  Right now with the Strait of Hormuz, basically nothing moving through there, we are losing 20 million barrels of oil.
[00:05:33]  So 20% gone.
[00:05:35]  So this is a big help.
[00:05:37]  They're talking about 400 million barrels of oil being released around the world.
[00:05:42]  And obviously the United States playing a huge role in that.
[00:05:44]  That covers you, basic math, 400 divided by 20.
[00:05:48]  That covers you for about 20 days to make up the difference in the strait.
[00:05:53]  The part they don't talk about takes about two weeks to actually get that oil out of those reserves onto trucks and moving into the system.
[00:06:01]  We're in that two-week wait period right now.
[00:06:04]  That's why you really haven't seen any impact yet at the pump.
[00:06:07]  Things are still going up.
[00:06:09]  But that could take you to kind of mid to end of April in the coverage of being able to replace what is currently being lost.
[00:06:16]  But obviously the clock is ticking.
[00:06:20]  That's not enough to sustain what's being lost forever.
[00:06:24]  And as the Secretary was pointing out, certainly it's a more critical concern in a lot of parts of Asia that are truly dependent on that oil that are coming through that strait.
[00:06:34]  And the White House hasn't put a timeline on when this operation in Iran could be complete.
[00:06:39]  The President has said that Iran is very, that the war in Iran is very complete and could end soon, even though they're not putting a timeline on it.
[00:06:48]  But I guess I want you to tell people, even if they were to pull out of Iran and end those operations tomorrow, it would still be some time before the Strait of Hormuz would actually be back up to production, right?
[00:07:02]  Like how quickly could it impact oil prices if the operation were to end?
[00:07:08]  Yeah, that's the critical question that's being asked right now across the business world and certainly by economists and traders.
[00:07:16]  I think what we're all coming to learn very quickly is, as you're saying, even if the hostilities end in the coming days or in the next week or two, it will take months to have that straight and all the companies that operate around that strait fully operational again.
[00:07:34]  There was a major aluminum producer out of the Middle East that talked about they don't expect to be back at full capacity until the end of the year.
[00:07:42]  You know, this is not flipping on a light switch.
[00:07:44]  And think about it.
[00:07:45]  If you were a global shipping company, do you want to go through that strait right now?
[00:07:49]  You're worried about mines.
[00:07:50]  You're worried about one cheap drone could come and the insurance market.
[00:07:56]  So even, and look, think about it, the insurance market is going, it's going to cost more to ship through there, even if this is declared over in a few days.
[00:08:04]  And those prices, it's almost like an extra tariff.
[00:08:06]  I mean, that's a tax, that's extra insurance costs, and you better believe that's going to be passed on to customers for the rest of the year.
[00:08:13]  So that's where you're seeing this compounding of costs that will continue to shock.
[00:08:19]  the global economy, including here in the United States.
[00:08:22]  I have a couple more questions for you before we turn to our callers, but I want to invite our viewers to start calling in now and join the conversation.
[00:08:29]  Democrats, your line is 202-748-8000.
[00:08:33]  Republicans, your line is 202-748-8001.
[00:08:38]  Independents, your line is 202-748-8002.
[00:08:43]  Now, I want to turn to some news from yesterday.
[00:08:47]  I'm looking at a Fox News, Fox Business article.
[00:08:50]  It says U.S. economic growth revised lower in the fourth quarter.
[00:08:56]  Economists expected U.S. GDP growth to grow at a rate of 1.4%.
[00:09:02]  We know it was revised down yesterday.
[00:09:05]  That number came out to 0.7%.
[00:09:08]  What does this tell you?
[00:09:09]  Well, what that tells me is shutdowns are costly.
[00:09:13]  You know, I know you all covered it well here on C-SPAN, but really the big part of that revision was that things were even more dire due to the government shutdown in the fourth quarter.
[00:09:25]  The number to really keep in mind, and this might be the most optimistic I sound in this hour today, but look, yes, it was an ugly figure, 0.7, barely any growth in the fourth quarter, but the number to keep in mind is consumer spending.
[00:09:40]  That's really the heart of the economy.
[00:09:42]  And that number was 2% growth.
[00:09:45]  Now, that's not phenomenal.
[00:09:46]  It's down from 3.5% in the prior quarter.
[00:09:49]  And obviously, end of the year, holiday shopping, you normally expect a good consumer number, but people were still spending some, you know, and that's where that 2% growth.
[00:09:58]  So I think that's a more realistic assessment of where the economy was when you strip out the noise with the tariffs and the shutdown.
[00:10:07]  And on inflation, it said those numbers came out.
[00:10:11]  February's inflation remained steady at 2.4%, basically in line with expectations.
[00:10:17]  Now this is way down since pandemic highs, of course.
[00:10:21]  We know you just talked about the consumer spending, 2%, but consumers are still saying that they're not feeling the type of reprieve that a lower inflation number is supposed to give Americans.
[00:10:34]  Why not?
[00:10:35]  It's pretty easy to explain.
[00:10:37]  And obviously mini prices across the economy are so much higher than they were a couple years ago.
[00:10:43]  And in particular, in recent months, electricity bills have really shocked people how high they've been, partly from the weather, partly from rising costs.
[00:10:52]  Now people are feeling it at the pump.
[00:10:54]  And I call it whack-a-mole inflation in the sense that you feel like, okay, finally, you know, used car prices aren't as high, or finally the egg prices have come down, but then something else hits.
[00:11:06]  Okay, now it's my electric bill I'm worried about, or now it's my auto insurance bill I'm worried about, or now it's the gas pump.
[00:11:12]  And you just, we have not really had a period of relief where basic budget costs for the middle class and moderate income Americans have been able to catch up.
[00:11:24]  And this inflation rate, I mean, 2.4%, it's not exactly where the Fed wants it.
[00:11:29]  We know that the President wants the Federal Reserve to bring rates down.
[00:11:33]  They've brought it down some, but not as far as he would like it to go.
[00:11:36]  That meeting is coming up next week.
[00:11:39]  How will inflation figures and the surge in energy prices figure into their right decision?
[00:11:44]  The Fed is on hold.
[00:11:47]  Many were hoping that they would cut those interest rates again.
[00:11:50]  I can tell you at Navy Federal that our phones were ringing off the hook in January and February when those mortgage rates briefly dipped below 6%.
[00:11:58]  People were interested again in buying and refinancing.
[00:12:01]  And now that's out the window.
[00:12:03]  You know, the interest rates, the Fed cannot cut in the midst of a supply shock that is going to keep inflation elevated probably for the rest of the year.
[00:12:14]  You mentioned the low number from the CPI report.
[00:12:17]  There's a couple of different inflation reports.
[00:12:19]  2.4% doesn't sound terrible when the 2% is your goal, but the one that really shocked a lot of people on Wall Street on Friday was something called the PCE inflation.
[00:12:29]  Which is what the Fed says.
[00:12:30]  Yes, which is what they pay attention to, particularly the core number to get nerdy out here.
[00:12:35]  That number rose to 3.1%, which was the highest since March of 2024.
[00:12:40]  So highest in basically two years.
[00:12:42]  That got their attention that they're not going to cut interest rates in a world where inflation even before the war started was far out of where they want it to be.
[00:12:54]  Now, what is that one specifically measure?
[00:12:56]  Because it's a little bit different from the CPI, right?
[00:12:58]  It is.
[00:12:58]  And one of the things that I've been stressing, the PCE inflation measure takes a bigger account of health care costs than the CPI.
[00:13:07]  And I think you all have covered it's very clear 2026 health care costs have been rising a lot with the expiration of the various subsidies that many people were receiving to buy health care on the marketplace.
[00:13:19]  Or even if you look at plans like I'm on an employer plan at Navy Federal, the average increase was very sharp this year for a lot of employer plans as well.
[00:13:29]  And you're starting to see that come through the data.
[00:13:32]  All right, let's turn to some phone calls.
[00:13:33]  Frank from Staten Island, New York, an independent.
[00:13:36]  You're first.
[00:13:37]  Good morning, Frank.
[00:13:39]  Hi, good morning.
[00:13:40]  Yes, a lot of things I'm trying to figure out with the prices.
[00:13:45]  I've seen over here in New York City that, and even in, I like to get gas in New Jersey, and the price has gone up like 60 cents in some places.
[00:13:57]  I heard a story that in California, it went from like $6 a gallon to $8 a gallon.
[00:14:03]  But then again, they have, which is insane and terrible, but they have a lot of climate change taxes on their fuel.
[00:14:11]  They should really at least use this time to get rid of those things temporarily because it's gone up.
[00:14:17]  But then again, like, you know, America can drill its own.
[00:14:20]  America has an emergency type of thing, which I think some of it has to be filled up as a way of getting prices down.
[00:14:29]  Really, India and China get a lot of fuel from the Strait of Hormuz.
[00:14:33]  America does not.
[00:14:35]  But I've heard that those ships were not being insured by Lloyds of London because London was afraid that they might get hit.
[00:14:47]  And one more thing, it's like you still don't have ships going into the Red Sea to go to the Suez Canal.
[00:14:55]  They're still going around the Cape of Good Hope, using more fuel to deliver fuel.

=== Live Mobile App Access (03:56) ===

[00:15:03]  And it's all coming to a head.
[00:15:05]  Please read.
[00:15:08]  Yeah, I mean, Frank's very well versed in this, as we all are now.
[00:15:12]  And look, I think he points to a couple of things that stood out to me.
[00:15:14]  He's right that, okay, we've tapped the strategic petroleum reserve, but there are other things we can do.
[00:15:21]  He talks about basically like a gas tax holiday, whether the federal gas tax or some of the state ones.
[00:15:26]  He pointed to California's that could be temporarily suspended.
[00:15:30]  I think if we get back to $4 gas, which is quite likely later this month, that a number of lawmakers at the state and federal level will start to turn to that.
[00:15:40]  It's interesting when he talks about the alternatives to the Strait of Hormuz.
[00:15:45]  I did see across my Bloomberg terminal yesterday that there are some ships that have started to use the Red Sea that he pointed to.
[00:15:52]  But again, I just go back to that math: 100 million barrels of oil a day, global demand.
[00:15:57]  We have lost 20 million.
[00:15:59]  You can make up one or two or three million by using these other avenues to try to get the oil into different ports or get it through different pipelines.
[00:16:10]  There is no physical way to make up 20 million lost barrels a day.
[00:16:17]  This afternoon, Louisiana Senator John Kennedy discusses his book, How to Test Negative for Stupid and Why Washington Never Will.
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[00:18:26]  Welcome back.
[00:18:27]  Joining us now to talk about the operations in Iran is CEO of Iraq and Afghanistan Veterans of America, Kylan Hunter.
[00:18:35]  Kylan, thanks so much for being with us this morning.
[00:18:38]  Thank you so much for having me.
[00:18:40]  Now, first, can you tell our audience about the mission of Iraq and Afghanistan Veterans of America, how many people you represent, and how are you funded?
[00:18:50]  Yeah, Iraq and Afghanistan Veterans of America was born out of the conflicts in Iraq and Afghanistan, as it sounds sounds like to advocate for