US EditionInflation Was Elevated Last Month Even Before the Iran War Sent Energy Costs Soaring
Oil prices surged nearly 20% in a month, worsening inflation that could delay Federal Reserve rate cuts amid economic uncertainty, analysts say.
- On Tuesday, the Iran war disrupted Persian Gulf shipping lanes, producing oil swings and gasoline jumps expected to increase March inflation when data are released.
- Shipping lanes through the Persian Gulf suffered a rare shutdown, removing a large share of regional oil output, and AAA reported U.S. gasoline at $3.54 a gallon, up about 20% last month.
- Economists project a sharp March gain with Laura Rosner-Warburton expecting inflation could jump 0.8%–0.9%, compared to a 0.3% core inflation rise in February.
- The Federal Reserve meets next week and officials say the fuel-driven spike will almost certainly delay any interest-rate cut amid a split over keeping rates at about 3.6% or reducing them despite an unemployment rate at 4.4%.
- Higher fuel costs will lift airfares and shipping costs, which can make groceries and restaurant meals more expensive, though the spike could reverse if the conflict ends soon, analysts say.
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Recession and stagflation risks are rising due to Iran conflict, as economist warns it’s ‘getting harder to argue disruption will be temporary’
"Clearly, the longer that oil remains at these levels, expectations of a sustained shock will only grow," Deutsche Bank's Jim Reid said.
View: Energy inflation is a global political liability
Tim’s viewEnergy-related inflation is the inescapable deciding factor for global politics this year. Gas prices — emblazoned in big numbers on signboards across every city — are the most tangible and emotional touchpoint of the global economy for US voters, and infamously decisive in national elections. The national average price of gasoline passed $3.50 per gallon this week, the highest level since 2024, following the disruption to global oil t…
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Inflation held steady last month before attack on Iran sent energy costs soaring
Inflation stayed stubbornly elevated last month as gas prices rose in a snapshot of what consumer prices looked like before the U.S.-Israeli attack on Iran sent energy costs soaring
– Reduces the risk that the interest rate will be raised as early as March, but it is not zero, says the chief economist.
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