Fed’s key inflation gauge hits 3.5% as Iran war pushes up gas prices
The Federal Reserve's preferred inflation gauge, the Personal Consumption Expenditures price index, rose to 3.5% in March, its highest rate in almost three years. The sharp hike in energy prices due to the US-Israeli war against Iran was largely responsible for the sudden jump in inflation.
The Federal Reserve's preferred inflation gauge rose to 3.5% in March, its highest rate in almost three years. The Personal Consumption Expenditures price index increased 0.7% from February, faster than expected. The annual rate of inflation jumped from 2.8% in February. Economists expected a 0.6% monthly rise and 3.6% annual rate. The US-Israeli war against Iran has slowed shipping traffic in the Persian Gulf and Strait of Hormuz, causing a sharp hike in energy prices. Consumer spending rose 0.9% from February, but when adjusted for inflation, it increased just 0.2%. When excluding food and energy costs, prices rose 0.3% from February and 3.2% on an annual basis, in line with expectations.
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