泵的力量：政治、通胀与市政信贷

The Power of the Pump: Politics,Inflation and Muni Credit The scale of the oil disruption this year has far surpassed thatof 2022, implying gas prices may not remain below the Biden-era peak for long. Recent polling, inflation, and toll andairport credit spreads all seem to be discounting theopposite. Public PolicyMichael McLean(v)+1 212 526 9393michael.mclean@barclays.comBCI, US CommoditiesAmarpreet Singh(ii)+1 212 526 1672amarpreet.x.singh@barclays.comBCI, US Oil market more stressed in 2026 than 2022...Gasoline prices are higher today than at samedate in 2022 (+$0.18/gal), and have risen more since the start of the Iran war than in 2022(+30%). And for good reason, 13% of global oil supply isoffline,versus 3% in 2022, albeit this isoffsetby lower demand from China. US Rates ResearchJonathan Hill, CFA(i)+1 212 526 3497jonathan.hill@barclays.comBCI, US ...While inflation and credit spreads remain more benign.Inflation expectations have notrisen as much as in 2022. Neither have toll road and airport credit spreads. Were the 2022analogy to unfold, inflation from one to two years out (ie, 1y1y CPI swaps) would be well over3%, while tight spreads of lower-rated toll roads and small and medium-sized airports,especially in tourist-heavy markets, might be vulnerable, given higher fuel prices and the Spiritliquidation. Municipal Credit ResearchMikhail Foux(ii)+1 212 526 7849mikhail.foux@barclays.comBCI, US Persistence matters most.Voters' perceptions of gas price changes may converge to reflectactual price movements, rather than simply correlating with political views. It is the duration ofhigher gas prices, not the spike, that matters most for the midterm elections and inflation, inour view. National average gas prices last reached $5/gallon in 2022,afterRussia invadedUkraine in February of that year, but they were not the dominant issue in the midterms, as Grace Cen(ii)+1 212 526 3571grace.cen@barclays.comBCI, US Thisdocument is intended for institutional investors and is not subject to all of theindependence and disclosure standards applicable to debt research reports prepared for retailinvestors under U.S. FINRA Rule 2242. Barclays trades the securities covered in this report for itsown account and on a discretionary basis on behalf of certain clients. Such trading interestsmay be contrary to the recommendationsofferedin this report. Francisco San Emeterio(ii)+1 212 526 7113francisco.sanemeterio@barclays.comBCI, US Data Science & Applied AIJosh Grasso(v)+1 212 526 0141joshua.grasso@barclays.comBCI, US Barclays Capital Inc. and/or one of itsaffiliatesdoes and seeks to do business with companiescovered in its research reports. As a result, investors should be aware that the firm may have aconflict of interest that couldaffectthe objectivity of this report. Investors should consider thisreport as only a single factor in making their investment decision. (i)This author is a debt research analyst in the Fixed Income, Currencies and CommoditiesResearch department and is neither an equity research analyst nor subject to all of theindependence and disclosure standards applicable to analysts who produce debt researchreports under U.S. FINRA Rule 2242. (ii)This author is a member of the Fixed Income, Currencies and Commodities Researchdepartment and is not an equity or debt research analyst. (v)This author is a registered US equity research analyst who is subject to US FINRA Rule 2241and who may write debt research under FINRA Rule 2242. FOR ANALYST CERTIFICATION(S) PLEASE SEE PAGE 17. FOR IMPORTANT EQUITY RESEARCH DISCLOSURES, PLEASE SEE PAGE 17. prices had started falling by end-June. For inflation, a 10% persistent increase in gas pricestends to boost headline CPI by 0.2pp within one to two months, while feed-through to core issmaller and takes longer. Implications.Various policy levers—SPR release, sanctions waivers, the Jones Act waiver, EPAwaiver to sell E15, a federal or state gas tax holiday, or export restrictions—could help close the$1/gal spread between AAA retail gas and Rbob, and help to contain what we believe is a $5/galred line for the administration. However, time may have run out for an opening of the StraitHormuz to prevent 2026 from being worse than 2022. The politics of gas prices Michael McLean(v)BCI, US Gas prices have become a political Rorschach test Recent polling indicates that perceptions of gas price changes track political views more closelythan actual movements in price. Americans who say that gas prices have increased "a lot" aremuch less likely to support President Trump and, by extension, the war in Iran. There is highcorrelation between support for the war and approval of President Trump. In a recentEconomist/YouGov survey, 61% of US adult citizens said gas prices had gone up a lot, but thepartisan divide was stark. Only 49% of Trump voters said gas prices had increased a lot,compared with 82% of respondents who said they voted for Kamala Harris in 2024. The divi