Fuel Costs Are Back on the Rise, and Trumpflation Is Spreading Across the Economy
Key Points
Gas prices had eased in recent months but are now rising again, and diesel prices reached an all-time high this week.
President Trump's tariffs and war with Iran are helping drive higher energy prices and inflation throughout the economy.
President Donald Trump is making his mark on the U.S. economy. The Trump administration's tariff policies (including a trade war with Canada) and the war with Iran have driven up energy prices and contributed to accelerating inflation. This "Trumpflation" is driving up costs across the economy.
Research from the non-profit analytics group Tax Foundation indicates that Trump-backed tariffs increased costs by about $1,000 per U.S. household in 2025 and $840 per household so far in 2026. Tariffs are import taxes levied on goods imported from other countries. Those costs are ultimately borne by U.S. businesses or are often passed on to American consumers.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
Image source: Getty Images.
Trump's war with Iran has caused major disruptions to global shipments of oil and natural gas from the strategically vital Strait of Hormuz. That has caused energy prices to go up in 2026. U.S. gasoline prices are back on the rise (but remain down somewhat from their March 2026 high), and diesel prices reached an all-time high national average of $5.897 per gallon as of Sept. 6, according to AAA research. Higher diesel costs are likely to lead to higher inflation for groceries and many consumer products on store shelves that rely on diesel-fueled trucks for distribution to retailers.
Trump seems unlikely to give up on his tariff policies anytime soon, and the Iran conflict might not truly "end" in 2026 or 2027. With an uncertain future of possibly higher inflation and higher energy prices, how should you invest?
There's at least one low-cost energy ETF that might help protect your portfolio amid the uncertainty.
How to invest for higher inflation: Vanguard Energy ETF (VDE)
Rising prices can be painful for consumers, and no one loves to pay higher prices for gasoline. But this doesn't have to be all bad news for investors. If America is going to experience higher inflation, one strong inflation-proof investment might be energy stocks.
The Vanguard Energy ETF (NYSEMKT: VDE) offers a portfolio of 111 energy stocks with a focus on exploration and production of oil, natural gas, and coal. The fund's top stock holdings include familiar names like ExxonMobil (21.9% of the fund), Chevron (14.3%), and ConocoPhillips (5.8%).
This Vanguard ETF has paid out a respectable dividend, yielding 2.24% in the past 12 months. And over the past five years, this energy ETF delivered annualized total returns of about 26.4%, far outperforming the S&P 500 (SNPINDEX: ^GSPC) at 12.8%.
Why should you buy VDE (or avoid it)?
Energy stocks can be risky and volatile, and they don't always beat the rest of the stock market. For the past 22 years, since this energy ETF's inception in September 2004, VDE has delivered average annual returns of 8.7%. That's less than the S&P 500's comparable average annualized return of 11.3%.
It's possible that the Iran conflict will end soon, energy prices will come down, more of Trump's tariffs will get overturned in court, or other deflationary events will happen in the economy to drive down inflation. If you want to make a targeted investment in the energy sector, the Vanguard Energy ETF is an easy way to do it. VDE is one of the best energy ETFs for good reason.
Investors could also do just fine by sticking with a long-term plan to buy and hold a diversified portfolio of high-quality stocks.
Ben Gran has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Chevron. The Motley Fool recommends ConocoPhillips. The Motley Fool has a disclosure policy.