The U.S. Bureau of Labor Statistics has published the March 2026 CPI data today. The Consumer Price Index in the United States increased 0.9% month-over-month in March 2026, the largest increase since June 2022, following a 0.3% gain in February and in line with forecasts.
The annual inflation rate in the US jumped to 3.3% in March 2026, marking the highest level since May 2024 and a sharp increase from 2.4% in both February and January.
The all items index rose 3.3 percent for the 12 months ending March, after rising 2.4 percent for the 12 months ending February. The all-items less food and energy index rose 2.6 percent over the year, following a 2.5-percent increase over the 12 months ending February.
“Don’t get fooled by the “miss” — this is a geopolitical inflation warning shot. The war is still on, oil remains elevated, and second-round effects on transportation, goods, and services haven’t even shown up yet. The Fed is now staring down a nightmare scenario where headline pressures reaccelerate while growth slows. Expect “higher for longer” to get a fresh lease on life unless oil collapses sustainably, which looks highly unlikely anytime soon. Traders celebrating today may be in for a rude awakening in May,” says Naeem Aslam, CIO, Zaye Capital Markets.
The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.9 percent on a seasonally adjusted basis in March, after rising 0.3 percent in February, the U.S. Bureau of Labor Statistics reported today. The index for all items less food and energy rose 0.2 percent in March.
The index for energy rose 10.9 percent in March, led by a 21.2-percent increase in the index for gasoline, which accounted for nearly three-quarters of the monthly all-items increase. The shelter index also increased in March, rising 0.3 percent. The index for food was unchanged over the month as the index for food away from home rose 0.2 percent, while the index for food at home fell 0.2 percent.
“The first inflation data from after the war in Iran confirmed what everyone was worried about – the oil shock contributed to an extremely high headline CPI number of 0.9% month-over-month.
Fortunately, the core inflation number – which strips out more volatile food and energy prices – was only up 0.2% MoM. This won’t make consumers happy (as obviously they are buying groceries and filling up the tanks of their cars), but should give the economy some room to absorb the higher energy price shock,” says Chris Zaccarelli, Chief Investment Officer for Northlight Asset Management.
Oil Prices
Brent crude futures jumped sharply after the war began on February 28. Oil prices surged 50%, rising from below $80 to above $119 within a few days. After the ceasefire was announced, prices fell about 10% to around $90, but have since moved back up to nearly $98, as bottlenecks in the Strait of Hormuz persist.
FOMC Meeting in April
The Federal Reserve is closely observing inflation expectations, facing challenges in meeting its 2% target, with officials indicating a slower timeline than previously expected, as noted in the mid-March meeting minutes.
The US Federal Reserve’s interest rate decisions, whether to cut, raise, or keep rates between 3.5% and 3.75%, are major worries for global market participants. We will see what Powell has to say at the next FOMC meeting on April 28-29.
The other big worry is that the March US CPI data may not fully reflect current oil price increases, which typically take 6-8 weeks to show effects. Thus, the April CPI data will be more informative regarding the impact of rising prices on the economy, influenced by the Iran war.
Concerns are rising that the recent ceasefire in the Iran war may not lessen fears about inflation, which could be viewed as a persistent issue rather than a temporary shock. The fear mirrors the 1970s, when persistent inflation was curtailed by the Federal Reserve’s drastic measure of imposing nearly 20% interest rates, which severely impacted the economy.
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