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A woman shops for dairy products at a local supermarket in the Sugar Hill neighborhood of the Manhattan borough of New York City on April 9, 2026.<\/p>\n
Charlie Tribleau | AFP | getty images<\/p>\n<\/div>\n<\/div>\n<\/div>\n
Inflation rose in March as the Iran war increased gasoline and other prices for consumers. <\/p>\n
The U.S. Bureau of Labor Statistics reported Friday that the consumer price index, a key inflation measure, rose 3.3% in March from a year earlier. This is more than 2.4% in February. <\/p>\n
The March data release represents the first CPI report since the Iran war began on February 28, and shows the financial fallout for consumers from the first month of fighting in the Middle East. <\/p>\n
While the U.S. and Iran agreed to a two-week ceasefire late Tuesday, economists said it will take weeks or months for the war’s inflationary impact to subside \u2014 and a prolonged conflict risks pushing consumer prices higher in areas such as food, airfare and manufactured goods. <\/p>\n
“Inflation is a problem and it’s going to get worse,” said Mark Zandi, Moody’s chief economist. “Clearly, the war in Iran is causing significant damage.”<\/p>\n<\/div>\n
“We were cautiously optimistic about inflation picking up this year,” said Thomas Ryan, North America economist at Capital Economics, as price pressures such as tariffs were easing. <\/p>\n
“Basically, we’re holding out right now, just seeing what happens with energy price shocks,” Ryan said. “If this goes on longer, we become more concerned about leakage into other areas of the consumer wallet,” he said. <\/p>\n<\/div>\n
The increase in inflation caused by the Iran war also complicates the Federal Reserve’s job of setting interest rate policy. <\/p>\n
At a March meeting, central bank officials said they expected to cut interest rates once this year, although some said it may be necessary to raise borrowing costs if inflation continues to rise due to the Iran war. <\/p>\n
Fed officials also said they would need to remain “nimble” as they watched the war’s impact on inflation, which remains above the central bank’s 2% target. <\/p>\n
“Inflation is well above anyone’s comfort level \u2014 both consumers and the Federal Reserve \u2014 and it’s not going to get better, at least in the next few months,” Zandi said.<\/p>\n<\/div>\n
A ship waits to pass through the Strait of Hormuz following a two-week temporary ceasefire between the US and Iran in Oman on April 8, 2026, which is conditional on the opening of the strait.<\/p>\n
Shady Alasar Anadolu | getty images<\/p>\n<\/div>\n<\/div>\n<\/div>\n
The recent increase in energy prices is related to oil. <\/p>\n
Iran has effectively closed down ship traffic through the Strait of Hormuz, a waterway used for transportation About one-fifth of the world’s oil supply. According to reports, it appears that the blockade remains largely intact even after the ceasefire. <\/p>\n Oil prices \u2013 as measured brent crude oil