Fed’s preferred inflation gauge hits 3-year high as gas prices spiked on Iran war
The U.S. personal consumption expenditures (PCE) price index rose 0.7% in March 2026, reaching a three-year high with a 3.5% year-over-year increase, driven largely by higher gas prices amid the Iran conflict. Core PCE inflation, excluding food and energy, increased 3.2% over the past 12 months, matching the prior month's reading. The Federal Reserve maintained interest rates between 3.50% and 3.75%, citing inflation concerns, while consumer spending grew 0.9% in March but slowed in real terms after inflation adjustment.
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Business Fed’s preferred inflation gauge hits 3-year high as gas prices spiked on Iran war By Reuters Published April 30, 2026, 12:47 p.m. ET US inflation accelerated in March as the Iran war raised gasoline prices, bolstering financial market expectations that the Federal Reserve could keep interest rates unchanged well into next year. The personal consumption expenditures price index jumped 0.7% last month, the largest gain since June 2022, after an unrevised 0.4% rise in February, the Commerce Department’s Bureau of Economic Analysis said on Thursday. The increase was in line with economists’ expectations. In the 12 months through March, PCE inflation shot up 3.5%, the biggest rise since May 2023, after increasing 2.8% in February.
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