Inflation soars to hottest levels in two years as war in Iran drives gasoline prices higher

Inflation ramped up in March to the hottest levels since May 2024 as higher energy prices slammed the economy – putting another dent in the Federal Reserve’s path to interest-rate cuts.The Consumer Price Index rose 3.3% in March over the past 12 months – a sharp rise from 2.4% the previous month, the Bureau of Labor Statistics said Friday.Core CPI – which excludes volatile food and energy prices – jumped 2.6% over the year, up from 2.5% in February.The heated inflation report was largely driven by a massive 21.2% monthly increase in gasoline prices, according to the Labor Department.It is the first glimpse into how the Middle East conflict is impacting inflation, as Iran’s blockade of the Strait of Hormuz – a critical route for 20% of the world’s oil – has created the worst-ever energy supply disruption.Fears of higher inflation sent consumer confidence tumbling to a record low in April, according to a University of Michigan survey released Friday.In a bright spot for the economy, the core figure showed a relatively modest increase, indicating that energy prices have yet to leak into the broader economy – but experts are warning that it’s only a matter of weeks before Americans see higher prices on store shelves.“The transportation costs have already gone up and the input costs that farmers, manufacturers, etc.are dealing with, they’ve already had to spend that money… and that will just flow through the system,” Joe Adamski, managing director of ProcureAbility, a supply chain consultancy, told The Post.Energy supply shocks from the Iran war will likely hit clothing in about three months, while fast-fashion items will see sharp price increases almost immediately, Adamski said.Processed foods will grow more expensive within the month, while farm-grown food will jump by this summer and fall, he added.Oil benchmarks saw some long-awaited relief this week as traders hope a two-week ceasefire with Iran and reopening of the Strait of Hormuz w...