US inflation rises by most since mid-2022 in March

The US inflation report, released on Friday showed that consumer prices in the world’s largest economy increased by the most in over 3 ½  years in March, primarily driven by the impact from the US / Iran war that lifted oil prices and subsequently hurt other sectors of the economy, adding to persisting inflationary pressure from President Trump’s  import tariffs.

Monthly Consumer Price Index rose by 0.9% last in March (the biggest jump in inflation since June 2022) compared to 0.3% rise in February.

Annualized figures show that inflation increased by 3.3% in twelve months to March, after 2.4% growth in February, with both figures coming mainly in line with expectations.

So-called Core CPI, which excludes the volatile food and energy components, rose by 0.2% in March, unchanged from previous month, while year on year CPI was up by 2.6% in March from 2.5% rise in February.

The separate report, released on Thursday, showed that the Personal Consumption Expenditures price indexes, Fed’s preferred inflation gauge, rose in February and remain well above Fed’s 2% target that further reduces chances of an interest rate cut this year, that markets were widely anticipating in previous few months.

The outlook is likely to remain darkened by concerns of prolonged negative impact even if a peace deal will be reached, with elevated oil prices to hurt economic growth and particularly households.