U.S. inflation surged in March at the fastest monthly pace since June 2022, driven almost entirely by an energy shock tied to the Iran war.

The Consumer Price Index (CPI) rose 0.9% month-over-month — matching Wall Street’s estimate — as energy prices jumped over 10.9% on the month. This marks the biggest monthly CPI jump in nearly four years.

The annual inflation rate soared from 2.4% in February to 3.3% in March, the highest since May 2024.

Core CPI, which strips out food and energy, came in at 0.2% month-over-month, below the 0.3% consensus. On an annual basis, the underlying inflation gauge rose 2.6% year-over-year, up from 2.5% in February and below expectations of 2.7.

The data gives the Federal Reserve little room to cut rates, with core inflation still running above levels consistent with the Fed’s 2% target.

This is a developing story…