""It's painful in the near term," said Michael Pearce, chief U.S. economist at Oxford Economics. "It's going to get more painful in April," when further gas price increases will lift inflation higher."
""I think the conditions are much more like a short, sharp shock than what we saw in 2022," Pearce noted, suggesting the impact may be shorter-lived than after the pandemic."
""I think the impact could fade by later this year," indicating a potential recovery from the inflationary pressures caused by rising gas prices."
Gas prices experienced the largest monthly increase in six decades, leading to a 3.3% rise in consumer prices in March. This spike, influenced by the Iran war, particularly affects lower- and middle-income households. Core prices rose 2.6%, indicating that the gas price surge has not yet broadly impacted other categories. Economists suggest that while the current inflation spike is significant, it may not lead to a long-term inflation crisis like that seen in 2022. The situation in the Strait of Hormuz remains critical for oil supply.
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