Fed's key inflation gauge hits 3.5% as Iran war pushes up gas prices
The Federal Reserve's preferred inflation measure, the PCE Price Index, rose 3.5% annually in March, up from 2.8% in February, driven largely by higher gas prices linked to the ongoing US-Israeli conflict with Iran. Core inflation, excluding food and energy, increased 3.2% year-over-year and rose 0.3% monthly, aligning with expectations despite slowing wage growth. Consumer spending grew 0.9% in March, though real spending gains were limited to 0.2% after inflation, while disposable income declined in real terms and the personal saving rate hit a four-year low.
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window.CNN.contentModel.leadingMediaType = 'image'; window.CNN.contentModel.isVideoCollection = false; Fuel prices are displayed at a Brooklyn gas station on April 28, 2026, in New York City. Spencer Platt/Getty Images Inflation Economy Investing Oil & gas See all topics Facebook Tweet Email Link Threads Link Copied! Follow Fast-rising gas prices lifted the Federal Reserve’s preferred inflation gauge to 3.5% in March, its highest rate in almost three years, new data showed Thursday. The Personal Consumption Expenditures price index rose 0.7% from February, a faster-than-expected acceleration from the previous monthly pace of 0.4%, the Commerce Department reported Thursday. The annual rate of inflation, which jumped from 2.8% in February, is now running at its fastest pace since May 2023.
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