U.S. inflation data due this coming Friday is likely to show the biggest monthly increase in consumer prices since 2022, with higher gasoline prices after the war involving Iran driving much of the rise, according to Bloomberg.
Economists surveyed by Bloomberg expect the consumer price index to rise 1% in March from the previous month. The same survey found that core CPI, which strips out food and energy, likely rose 0.3%.
The outlet said the expected jump in headline inflation follows a surge in gasoline prices that pushed pump costs up by about $1 a gallon. Oil markets have been shaken by five weeks of conflict, with crude rising to nearly $120 a barrel last month after attacks on key Middle East energy assets and Iran’s effective closure of the Strait of Hormuz.
The report said the International Energy Agency described the disruption as the biggest supply shock in the history of the oil market. Bloomberg also reported that OPEC+ warned on Sunday that damage to Middle East energy infrastructure could keep weighing on supply even after the war ends, even as the group approved what it described as a symbolic increase in output quotas for next month.
Another inflation report due a day earlier is also expected to show price pressures were still running hot before the conflict added new strain through energy markets. Bloomberg reported that economists expect the core personal consumption expenditures price index, the Federal Reserve’s preferred inflation gauge, to have risen 0.4% in February for a third straight month, excluding food and energy.
Bloomberg said sticky inflation, steadier labor-market conditions, and new risks tied to the Middle East conflict may make it harder for the Federal Reserve to cut interest rates this year.
Bloomberg Economics said strong payroll growth and a lower unemployment rate do not help the case for rate cuts soon. It also said the data due this week is unlikely to support a move toward reductions.
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