US expects sharp inflation surge for the first time since the war with Iran
Kyiv • UNN
The Consumer Price Index in March could rise by 1% due to rising gasoline prices. The Fed is likely to postpone interest rate cuts amid persistent inflationary pressure.
The US Consumer Price Index in March could rise by 1% – the sharpest monthly jump since 2022 due to rising fuel prices, economists surveyed by Bloomberg predict, UNN writes.
Details
According to analysts, the main factor will be a sharp increase in gasoline prices – by approximately $1 per gallon after the escalation of the war with Iran. At the same time, core inflation, excluding energy and food, is expected to rise by 0.3% for the month.
Additionally, the core Personal Consumption Expenditures (PCE) index, used by the Federal Reserve, could have risen by 0.4% for the third consecutive month in February. This indicates that inflationary pressures remained persistent even before the escalation in the Middle East.
The Fed may postpone rate cuts
Amid rising prices and a stable labor market, the Federal Reserve may find it difficult to move to cutting interest rates this year.
The data is unlikely to confirm the need for rate cuts anytime soon
New inflation data and minutes from the Fed meeting are expected to show how seriously the regulator assesses the risks associated with the war in Iran and rising energy prices.
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