Inflation rises in US amid Iran war, Hormuz blockade

Key Points

• US consumer prices rose 3.3% over the year ending in March 2026, the highest annual inflation rate in nearly two years.
• Energy prices surged 10.9% in March, led by a 21.2% spike in gasoline prices that accounted for nearly three-quarters of the monthly CPI increase.
• Core inflation, excluding food and energy, rose 2.6% annually and 0.2% monthly, remaining relatively contained despite the energy shock.
• The Dallas Federal Reserve estimates a prolonged Strait of Hormuz closure could add up to 0.49 percentage points to core inflation over three quarters.
• Airfares rose 2.7% in March and are 14.9% higher than a year earlier, showing broader transportation cost impacts.

Full Details

US consumer prices jumped in March 2026, with the headline CPI rising 3.3% over the past year—the highest rate since mid-2024 and a sharp reversal from February's 2.4%. The monthly increase was 0.9%, driven overwhelmingly by energy costs, which climbed 10.9% due to the war with Iran and the closure of the Strait of Hormuz. Gasoline prices alone surged 21.2%, accounting for nearly three-quarters of the overall monthly increase. Airfares also rose 2.7% in March, bringing the annual increase to 14.9%. Core inflation, which excludes food and energy, edged up 0.2% monthly and 2.6% annually. Researchers at the Dallas Fed estimate that a prolonged Hormuz closure could add as much as 0.49 percentage points to core inflation if it lasts three quarters.