Diesel at Record Highs Amid Persistent Inflation Strains Households

Diesel fuel prices reached an average of $6.51 per gallon, an all-time high, while broader inflation measures remain elevated and mortgage rates have topped 7 percent. These developments raise costs for farmers, truckers and consumers at a time when the 10-year Treasury yield has climbed roughly 100 basis points since late February and briefly exceeded 5 percent.

The increases coincide with the U.S. and Israel conflict with Iran that began in late February. Treasury Secretary Scott Bessent met Chinese Vice Premier He Lifeng over the weekend to discuss trade and artificial intelligence ahead of a planned summit between Presidents Xi Jinping and Donald Trump. On Sept. 10 the Treasury conducted a $5 billion buyback of 10-year and 20-year notes that Bessent later described to the House Financial Services Committee as successful because yields would otherwise have risen further.

The Federal Open Market Committee raised its benchmark rate target to 3.75-4 percent on Sept. 16, citing elevated inflation. President Trump, who appointed Fed Chair Kevin Warsh, had urged lower rates yet told reporters he advised Warsh the vote would not matter. White House economic adviser Kevin Hassett told Fox News that third-quarter GDP is tracking at 5 percent, jobless claims are at the lowest level since World War II, and inflation has fallen sharply in recent months after cumulative price increases of about 20 percent during the prior administration.

Sen. Chuck Grassley proposed emergency diesel embargoes modeled on 1970s measures or limits on oil-company margins for domestic sales to farmers and truckers. The suggestions drew criticism on social media for resembling price controls. Polls cited in the same period showed only 23 percent of voters rating the economy excellent or good and 62 percent calling grocery prices a major problem.

Bessent noted that the U.S. bond market has outperformed other developed markets since Trump took office. Hassett pointed to declining drug prices and real income growth as evidence of improvement, while acknowledging that many households still feel prices are too high. No independent verification of a $97 billion aggregate extra fuel cost figure has appeared in other reporting.