Inflation surges to highest level in nearly two years as energy costs spike

"The U.S. war with Iran and the resulting spike in energy prices has pushed inflation to its highest level in nearly two years, with consumer prices in March up 3.3% from a year ago."

"Gas prices have jumped by more than a dollar a gallon, on average, since the U.S. and Israel launched their attack on Iran, accounting for nearly three-quarters of the inflation increase."

"Chicago Federal Reserve Bank President Austan Goolsbee expressed concern that the longer inflation stays above the Federal Reserve's 2% target, the greater the risk that high inflation becomes baked into the economy."

"Despite the current inflation spike, a survey from the New York Fed indicated that people expect higher inflation in the short run but believe it will decrease in the long run."

Inflation in the U.S. has surged to 3.3% year-over-year, the highest since May 2024, largely due to rising energy prices from the war with Iran. Gas prices have increased significantly, contributing to a 0.9% rise in consumer prices from February to March. Core inflation, excluding food and energy, stands at 2.6%. Concerns arise that prolonged inflation above the Federal Reserve's 2% target may embed high inflation in the economy, despite public expectations of a long-term decrease in inflation rates.

Read at www.npr.org