The United States Consumer Price Index (CPI) rose in March to 3.3% year-on-year, the highest level since May 2024 and in line with market forecasts, which estimated a considerable increase compared to 2.4% in February driven by high gasoline prices due to the war in Iran.
Core inflation, which excludes energy and food indices, increased to 2.6%, one tenth more than in February, reported the Bureau of Labor Statistics (BLS), in line with the moderate estimated impact of President Donald Trump’s tariffs, before the possible increase derived from the conflict in the Middle East.
The war between the US and Israel against the Islamic Republic has plunged the markets into uncertainty and skyrocketed the price of hydrocarbons due to the interruption of the passage of tankers through the strategic Strait of Hormuz, blocked by Tehran in retaliation for the war and on whose reopening the current ceasefire depends.
In monthly terms, inflation rose 0.9% in the third month of 2026, after the previous 0.3% increase.
Core inflation registered a month-on-month increase of 0.2%, at the same level as February, the BLS report revealed.
The energy index was the main driver of the rise, with a 10.9% increase in March, driven by a 21.2% increase in the gasoline index, which accounted for almost three-quarters of the monthly increase in the general index.
White House Chief Economist Kevin Hassett acknowledged the negative effects of the war and predicted that once “the normal pace” of transit in the Strait of Hormuz is restored, “we expect the situation to return to normal.”
«What we expect, and what the futures markets anticipate, is that there will be, as you know, a rapid reduction in energy prices once we manage to reopen the strait. “There are vessels crossing right now, but they are doing so at about 10% of their usual pace,” he told Fox Business.
Regarding the peace negotiations between Iran and the US this weekend in Pakistan, the director of the White House National Economic Council insisted that Washington has sent “an elite team” but clarified that they have “backup plans if necessary.”
The cost of housing, usually the data that contributes the most to the growth of the CPI, increased 0.3%, while the price of food remained unchanged in March after rising 0.4% in February and that of food outside the home rose 0.2%.
In year-on-year terms, the energy component increased by 12.5%, while the food component grew by 2.7%.
Airfares, clothing, home furnishings, education and new vehicles were among the indexes that rose in March.
Those that declined included health care, personal care and used cars and trucks.
Inflation, along with unemployment data and gross domestic product (GDP), is key to evaluating the health of the economy and will help the Federal Reserve make decisions on monetary policy during its next meeting scheduled for April 28 and 29.
