Fed’s preferred inflation gauge worsens as Iran war sends food, energy prices surging
US inflation has surged to its highest rate in three years, largely due to rising energy prices amid the ongoing war with Iran. The personal consumption expenditures price index rose 3.8% year-on-year in April, prompting concerns about the Federal Reserve's interest rate policies. As inflation continues to outpace wage growth, consumer spending may decline, impacting the economy further.
- ▪Inflation increased 3.8% year-on-year in April, the largest rise since May 2023.
- ▪The conflict in Iran has disrupted shipping and strained global supply chains, leading to higher prices for various goods.
- ▪Gasoline prices have risen over 50% since the war began at the end of February.
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Business Fed’s preferred inflation gauge worsens as Iran war sends food, energy prices surging By Reuters Published May 28, 2026, 11:31 a.m. ET See more of our coverage in your search results. Add The New York Post on Google US inflation increased at its fastest pace in three years in April, driven by higher energy prices amid the war with Iran, and cementing economists’ views that the Federal Reserve could hold interest rates unchanged well into next year. The personal consumption expenditures price index jumped 3.8% in the 12 months through April, the largest rise since May 2023, the Commerce Department’s Bureau of Economic Analysis said on Thursday. PCE inflation advanced by an unrevised 3.5% in March.
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