C redit card spending on gasoline rose 19% the week ending March 21 compared to a year before, as a war in Iran chokes off oil flowing through the Strait of Hormuz. Gas prices averaged $4.15 a gallon nationwide on Friday, up nearly 40% from the $2.98 average recorded before the conflict began.
Related Brief 18h ago
inflation Gasoline price spikes lock in higher borrowing costs for 2026
Interest rate cuts are likely delayed for several months as inflation veers away from the Federal Reserve's 2% target. The Consumer Price Index rose 0.9% in March 2026, the largest monthly increase since June 2022. Gasoline prices jumped 21.2%, the largest spike on record, accounting for nearly three-quarters of that monthly rise. National average retail gasoline prices crossed $4 a gallon for the first time in over three years. Diesel prices increased 30.8%, the biggest gain since the government began tracking the category, while overall energy prices rose 10.9%, the sharpest climb since 2005. The annual inflation rate rose to 3.3% in the 12 months through March, up from 2.4% in February. Core CPI, excluding food and energy, increased 0.2% monthly and 2.6% annually. The price surges followed the U.S.-Israeli war with Iran, which closed the Strait of Hormuz and sent global crude oil prices more than 30% higher. The Federal Reserve's March meeting minutes indicate a growing number of policymakers believe rate hikes may be necessary if inflation remains entrenched.
This fuel spike drove consumer prices up 3.3% in March from a year earlier, the biggest yearly increase since May 2024. On a monthly basis, prices rose 0.9%, the largest increase in nearly four years. The surge has already reached other sectors: airlines raised fares 2.7% last month, and delivery services including UPS and FedEx have implemented fuel surcharges. Some small manufacturers report shipping costs rising between 30% and 40%.
Related Brief 1d ago
inflation March inflation surge set to cost consumers $8.4 billion in fuel as energy shock ripples through economy
Consumers have already paid $8.4 billion in extra fuel costs since the Iran war began, a surge that will register Friday as the sharpest monthly inflation spike since 2022. The March Consumer Price Index is forecast to rise 0.9 percent month over month, pushing annual headline inflation to 3.3 percent, driven by a 10.6 percent jump in energy prices. Gasoline now averages over $4 a gallon nationwide, a direct result of disrupted oil flows through the Strait of Hormuz, the world’s most critical petroleum corridor. This is not a typical energy blip: the U.S. has seen the largest one-month fuel cost increase since at least 1957. The shock is rippling beyond the pump. Transportation, food distribution, and manufacturing costs are rising, pushing core CPI up 0.3 percent for the month and 2.7 percent year over year. That keeps the Federal Reserve on hold. Markets assign a 98.4 percent probability to no change at the April 29 meeting, with rates expected to remain at 3.50–3.75 percent. Just months ago, the Fed projected one rate cut in 2026. Now, economists have erased that expectation. Some Fed officials have even flagged potential hikes if inflation accelerates further. Oxford Economics forecasts headline inflation will climb above 4 percent in April—despite a temporary ceasefire. The war hasn’t just moved oil. It has repriced the cost of moving everything.
Consumer sentiment fell to a record low index of 47.6 in April. While total credit card spending excluding gasoline rose 3.6% over the year, economists warn that prolonged fuel costs will restrict household budgets and stifle broader consumer spending.
Related Brief 10h ago
inflation Trump Tariffs Result in Full Consumer Price Pass-Through
Consumers paid a dollar-for-dollar price increase for goods when retailers' acquisition costs rose due to 2025 tariffs. If a retailer's cost for a good rose by $1 because of a tariff, the consumer paid $1 more for that good seven months months later. This full pass-through to consumer prices is now effectively complete. These tariffs, implemented by President Donald Trump in 2025, raised core goods personal consumption expenditure (PCE) prices by 3.1% through February 2026. The Federal Reserve's preferred inflation metric, the broader core PCE index, rose by 0.8% as a result.
The shift in inflation's trajectory moves the current rate further from the Federal Reserve's 2% target. Consequently, the central bank will almost certainly postpone any cut in interest rates for months.
Related Brief 1d ago
inflation Gasoline prices surge 21.2% in a month as Iran blocks Strait of Hormuz, pushing inflation to 3.3%
Inflation surged to 3.3% in March over the past 12 months, the highest level since May 2024, up sharply from 2.4% the previous month. The jump marks a direct hit to household budgets, as rising energy costs ripple through transportation, shipping, and consumer goods. The core Consumer Price Index, which excludes volatile food and energy, also ticked up to 2.6% from 2.5%, signaling broader price pressures are persisting. The main driver: gasoline prices soared 21.2% in a single month — the largest monthly increase in two years. That spike was not random. It followed Iran’s blockade of the Strait of Hormuz, a chokepoint for 20% of the world’s oil supply. The disruption has triggered the worst energy supply shock on record, constricting global oil flows. With energy-intensive sectors now passing on higher costs, inflation is accelerating just as the Federal Reserve weighs when to cut interest rates. That decision is now in doubt — the hotter CPI report undermines the case for near-term rate relief.
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