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Gasoline prices are displayed at a Sunoco station in the Brooklyn borough of New York City, U.S., March 31, 2026. <\/p>\n
Shannon Stapleton | Reuters<\/p>\n<\/div>\n<\/div>\n<\/div>\n
Inflation spiked<\/a> in March as the Iran war pushed up gasoline<\/a> and other prices<\/a> for consumers. <\/p>\n The consumer price index, a key inflation measure, rose 3.3% in March from a year earlier, the U.S. Bureau of Labor Statistics reported Friday. That\u2019s up from 2.4% in February<\/a>. <\/p>\n The March data release represents the first CPI report since the Iran war started on Feb. 28, and illustrates the financial fallout for consumers from the first month of fighting in the Middle East. <\/p>\n While the U.S. and Iran agreed to a two-week ceasefire late Tuesday<\/a>, economists said the inflationary effects of the war will likely take several weeks or months to unwind<\/a> \u2014 and that a prolonged conflict risks raising consumer prices more broadly, to areas like food, airfare and manufactured goods. <\/p>\n \u201cInflation is a problem and it\u2019s only going to get worse,\u201d said Mark Zandi, chief economist at Moody\u2019s. \u201cClearly, the war in Iran is doing significant damage.\u201d<\/p>\n<\/div>\n \u201cWe were cautiously optimistic on inflation heading into this year,\u201d as price pressures like those from tariffs were unwinding, said Thomas Ryan, a North America economist at Capital Economics. <\/p>\n \u201cBasically, we\u2019re on hold now, just to see what happens with the energy price shock,\u201d Ryan said. \u201cIf it\u2019s long-lasting, we become more concerned about leakage\u201d into other areas of consumers\u2019 wallets, he said. <\/p>\n<\/div>\n The Iran war\u2019s inflationary bump also complicates the Federal Reserve\u2019s job of setting interest-rate policy<\/a>. <\/p>\n At the March meeting, officials at the central bank said they expect to cut interest rates once this year, though some said it may be necessary to raise borrowing costs<\/a> if the Iran war leads to sustained higher inflation. <\/p>\n Fed officials also said they would need to remain \u201cnimble\u201d as they weighed the impact the war had on inflation, which continues to hold above the Fed\u2019s 2% target. <\/p>\n \u201cInflation is well above anyone\u2019s comfort level \u2014 both consumers and the Federal Reserve \u2014 and that\u2019s not going to get any better, at least in the next few months,\u201d Zandi said.<\/p>\n<\/div>\n A ship waits to pass through the Strait of Hormuz following the two-week temporary ceasefire between the US and Iran, which is conditional on the opening of the strait, in Oman on April 8, 2026.<\/p>\n Shady Alassar | Anadolu | Getty Images<\/p>\n<\/div>\n<\/div>\n<\/div>\n The recent run-up in energy prices ties back to oil. <\/p>\n Iran has effectively choked off ship traffic through the Strait of Hormuz, a waterway used to ship\u00a0about a fifth of the world\u2019s oil supply<\/a>. The blockade appears to largely still be intact<\/a> even after the ceasefire, according to reports<\/a>. <\/p>\n Oil prices \u2014 as measured by Brent crude oil<\/a>The Iran war\u2019s effect on oil and gas prices<\/h2>\n