US inflation jumped

U.S. consumer prices rose 0.9 percent in March from February, pushing annual inflation to 3.3 percent in the sharpest monthly jump since June 2022. (bls.gov) The Bureau of Labor Statistics said energy prices climbed 10.9 percent in March, with gasoline up 21.2 percent and accounting for nearly three quarters of the monthly increase in the overall consumer price index. Shelter rose 0.3 percent, while food was unchanged. (bls.gov) Strip out food and energy, and so-called core inflation rose 0.2 percent in March and 2.6 percent over 12 months, up from 2.5 percent in February. Medical care, personal care, and used cars and trucks were among the categories that fell. (bls.gov) The consumer price index is a broad basket of everyday purchases, from rent and groceries to gasoline and airfare, used to track how fast household costs are changing over time. In March, the headline number accelerated even as the core measure stayed relatively subdued. (bls.gov 1) (bls.gov 2) March was the first full consumer-price report since the Iran war began on February 28, and economists told CNBC that higher oil prices were already lifting gasoline, airline fares, food, and shipping-related costs. CNBC reported that the United States and Iran agreed to a two-week ceasefire on April 7, but economists said the price effects could take weeks or months to unwind. (cnbc.com) Federal Reserve officials were already discussing that risk at their March 17-18 meeting. Minutes released April 8 said the Middle East conflict drove a sharp rise in energy prices, lifted near-term inflation projections, and pushed crude oil futures up about 50 percent during the period. (federalreserve.gov) Those minutes also showed markets moving their interest-rate bets. The Federal Reserve said futures pricing no longer fully reflected a rate cut until December, while options pricing implied about a 30 percent probability of rate hikes through early 2027. (federalreserve.gov) The March report leaves a split picture: gasoline and other energy-linked costs jumped fast, but core inflation and shelter were still rising at a slower pace than the headline number. The next consumer-price report will show whether March was a one-month energy shock or the start of broader price increases. (bls.gov)