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6h ago

Inflation Gauge Stays High as Energy Shock Sets Up Sharp March CPI Jump

Rising oil and gasoline costs are delaying rate-cut hopes.

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A man shops for sandals at a Ross store on March 17 in Alhambra, California.
FILE - A California's SNAP benefits shopper pushes a cart through a supermarket in Bellflower, Calif., Feb. 13, 2023. (AP Photo/Allison Dinner, File)

Overview

  • The Fed’s preferred gauge rose 0.4% in February, Thursday’s PCE report showed, keeping annual inflation at 2.8% with core at 3.0%.
  • Economists forecast Friday’s CPI for March to rise about 0.9% month over month to roughly 3.3% year over year, with some projecting April could top 4% if energy stays high.
  • The Iran war drove the biggest one-month surge in U.S. fuel costs since at least 1957, pushing average gas prices above $4 a gallon.
  • Consumer spending climbed 0.5% in February, yet inflation-adjusted growth was about 0.1% as higher prices squeezed budgets.
  • Fed minutes released Wednesday signaled a lower chance of near-term rate cuts and warned a prolonged conflict could force hikes if energy costs bleed into core prices.