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Washington — The Commerce Department reported Thursday that the Personal Consumption Expenditures price index rose 0.7% in March from February and 3.5% year-over-year, the largest annual increase in nearly three years. Gasoline prices surged about 21% in March, and outlets linked the spike to tensions involving Iran this month. The increase pushed headline inflation farther from the Fed’s 2% goal and prompted Federal Reserve officials to signal a likely hold on interest-rate cuts this week. Core PCE, which excludes food and energy, rose 0.3% in March and 3.2% year-over-year, reinforcing policymakers’ cautious approach and near-term monitoring of energy-driven price risks.

Prepared by Christopher Adams and reviewed by editorial team.