ECONOMY

Inflation rises as gas spike delays Fed rate cuts

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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.

Timeline of Events

Early 2026: Iran-related tensions escalate, contributing to rising global oil prices.
March 2026: U.S. gas prices jump nearly 21% month-to-month.
Late April 2026: Commerce Department releases March PCE data showing 0.7% monthly increase.
Late April/early May 2026: Core PCE reported at 0.3% monthly and 3.2% annually.
Early May 2026: Federal Reserve signals a likely pause on near-term rate cuts while monitoring inflation.

Why This Matters to You

Rising inflation means your dollar doesn't go as far. The gas price spike could hit your wallet at the pump. If you're planning a road trip or commute by car, budget a bit more for fuel.

The Bottom Line

Inflation is on the rise, largely due to gas prices. The Fed is holding off on rate cuts for now, keeping a close eye on energy-driven price risks. Worth forwarding if you know someone who's feeling the pinch at the pump.