Inflation Jumps in March

U.S. Inflation Accelerates in March U.S. inflation, as measured by the personal consumption expenditures (PCE) price index, accelerated in March 2026, posting its largest monthly gain since June 2022. This increase, driven partly by rising gasoline prices linked to the Iran war, reinforces financial market expectations that the Federal Reserve may maintain current interest rates well into the next year.

The PCE price index rose 0.7% in March, following a 0.4% increase in February, aligning with economists' forecasts. Annually, PCE inflation climbed to 3.5% in the 12 months through March, up from 2.8% in February and marking the largest rise since May 2023. Gasoline prices surged 24.1% nationally in March, contributing significantly to the overall inflation figure.

Excluding volatile food and energy components, the core PCE price index increased 0.3% in March, a deceleration from the 0.4% rise in February. On a year-over-year basis, core PCE inflation held steady at 3.2% through March. The Federal Reserve, which targets 2% inflation, maintained its benchmark overnight interest rate in the 3.50%-3.75% range on Wednesday, citing inflation concerns stemming from the conflict.