March inflation data is expected to show a 1% month-over-month increase in US CPI, the largest since 2022, driven by a $1 surge in gas prices due to the war in Iran. Core CPI is projected to rise 0.3%. Fed indications suggest rate cuts in 2026 may be delayed, as core PCE is forecast to increase 0.4% in February. Rising gas prices and a resilient labor market could keep inflation elevated, complicating the Fed’s policy path.

BlockBeats news, on April 5, economists stated that the sudden surge in gasoline prices felt directly by U.S. consumers will be fully reflected in the key inflation data to be released this week. The U.S. March CPI is expected to rise 1% month-over-month, marking the largest monthly increase since 2022; core CPI may rise 0.3% month-over-month.

Previously, the war in Iran pushed gasoline prices at U.S. gas stations up by about $1 per gallon. On the day before the CPI data release, the Fed’s preferred inflation indicator will provide insight into price pressures prior to the conflict.

Economists expect the core PCE price index to rise 0.4% for the third consecutive month in February, suggesting that the progress of inflation cooling to a more moderate level had already stalled even before the conflict erupted. Combined with signs of stabilization in the U.S. labor market, persistent price pressures, and new inflation risks from the Middle East war, this helps explain why the Fed may struggle to cut rates this year. (Jin10)