Finance

The Personal Consumption Expenditures price index jumped 0.7% in March, pushing the annual inflation rate to 3.5%, the highest level since mid-2023. This spike was primarily attributed to a massive 24.1% monthly surge in gasoline prices resulting from the ongoing conflict in Iran, complicating the Federal Reserve's path for future interest rate cuts.

Oil markets remain highly volatile with Brent crude futures trading around $111 to $120 per barrel as the effective closure of the Strait of Hormuz continues. Prices surged after executive warnings that the U.S. blockade of Iranian ports could last for months, marking one of the most severe energy price shocks in the modern era.

The US economy expanded at a 2.0% annualized rate in the first quarter of 2026, demonstrating resilience even as the conflict in the Middle East began to impact energy costs. While the figure slightly missed some analyst consensus, it represented a notable acceleration from the previous quarter, supported by steady consumer spending and a rebound in federal non-defense compensation.