Mortgages for buying apartments are becoming more expensive again: high-rise buildings in Dübendorf ZH.image: Gaëtan Bally/Keystone
US President Donald Trump’s Iran war is putting a strain on household budgets worldwide – what does that have to do with Russian President Vladimir Putin.
May 19, 2026, 9:30 a.mMay 19, 2026, 9:30 a.m
The 2020s increasingly look like a new era. An era in which there is more inflation and higher interest rates than in the past decade. An era in which each individual’s cost of living has become a geopolitical arena: conflicts are fought there, sometimes even lost or won.
The pioneer of this new era is Russian President Vladimir Putin. To make Russia an empire again, Putin attacked Ukraine in 2022. Geostrategists long ago said that it was the country without which Russia could no longer be an empire, but with which Russia would automatically become an empire.
Putin wants to make Russia a great power again.Image: keystone
In order to end Europe’s aid to Ukraine, Putin targeted the Europeans’ wallets right from the start. He cut off their gas supply and plunged them into an energy crisis. Gas became more expensive. Electricity. Food. Bread in Germany by 30 percent in two years. Putin’s imperial campaign disrupted everyday household budgets.
In Switzerland, Oberlunkhofen was hit particularly hard. The Aargau community could have bought its electricity at the last second before the energy crisis, but forgot to send an email. Electricity prices rose by 260 percent, and a local baker had an electricity bill four times higher. The electricity supplier apologized: “We made a mistake.”
Two months later, more than 2,000 kilometers away, Putin mocked “ordinary Europeans” at a Moscow forum. You would now pay three times more for gas and electricity than before. “Firewood is being collected again in Europe – like in the Middle Ages.”
Putin’s attempt at blackmail increased the shock of the corona crisis. Inflation shot to a record high. But it quickly subsided again. In 2025 it will be back to 2 percent in the euro zone. Inflation seemed to be under control again, as it was before Corona. A return to normality back then seems possible.
A historic appearance by Donald Trump raises fears that things could turn out differently.
The US bears the costs of US tariffs
On April 2, 2025, he imposed high tariffs on the entire world. Against an uninhabited penguin island as well as against the actually allied European Union (EU) and against Switzerland. He only wants to lower the tariffs again if he promises: EU investments in the USA worth 600 billion dollars. Trump says: “I can do it, what I want.»
Trump is actually threatening the European economy with his tariffs. But the tariffs will be borne less by Europeans than by US consumers, depending on estimates 90 until 96 percent.
She had to for example, endure a trend reversal in durable goods, such as cars, furniture or consumer electronics. Before Trump’s tariffs, they were constantly getting cheaper, then more expensive afterward. This is one of the reasons why inflation in the USA will be higher in 2025 than it would have been otherwise: by estimates of 0.5 to 0.8 percentage points higher.
Overall, however, there is no global inflation shock. It still seems possible that inflation and interest rates will return to previous record low levels. Before the twin crises of Corona and Putin’s energy blackmail. It is the hope for a return to the old normality. Then the next crisis comes.
In the Iran war, it is now Trump who is being blackmailed, and European consumers are being dragged into it again. Iran largely controls shipping traffic through the Strait of Hormuz, where 20 percent of the world’s oil supply previously travels. The price of oil is not close to $200 per barrel as feared, but it is well above $100 – and that is enough to fuel inflation worldwide.
In Switzerland, this island of price stability, price increases are, as usual, the lowest. But here too there is no longer almost no annual inflation, but rather 0.6 percent. According to initial estimates, annual inflation in the euro zone in April is an average of 3 percent – and therefore higher than it has been since autumn 2023. So far it is strongest in the USA – which is now moving the financial markets.
Prices were 3.8 percent higher in April than in the previous year, as recently announced became. This means inflation is higher than it has been in three years more. At that time, however, she was on the decline. Now things are on the rise again.
The highest interest rates since 2007
That makes investors nervous. The USA is feeling this, just hours after it published the new inflation figure of 3.8 percent. When your finance ministry issues a 30-year government bond, investors suddenly demand it, according to the Financial Times 5 percent – more than ever since 2007 more.
The Iranian regime set all of this in motion. As a result, Trump is coming under pressure and his popularity ratings are falling lower and lower. Geopolitics and cost of living collide.
Similar scenes are taking place in Europe, and even to a lesser extent in Switzerland. The interest rate on ten-year government bonds in Germany is higher than it has been since 2011. In Switzerland, this interest rate has more than doubled compared to February.
Nervous investors are demanding more interest, making mortgages more expensive. In Europe and the USA, the central banks have not increased their key interest rates, but what the “Financial Times” headlined at the beginning of the week is still evident: “Mortgage costs are rising sharply due to the Middle East conflict.”
This means, at least for the time being, that the high inflation in the first half of the 2020s was not just a blip. It could be the new normal.