Economists See U.S. March CPI Up 1% MoM; Persistent Inflation May Keep Fed on Hold Through 2026

April 5 — Economists say the recent jump in gasoline prices, which U.S. consumers have felt immediately at the pump, is expected to show up fully in key inflation data due this week. The March consumer price index (CPI) is projected to rise 1% month over month, the biggest monthly increase since 2022. Core CPI, which excludes food and energy, is forecast to increase 0.3% month over month. Earlier, the war in Iran drove U.S. retail gasoline prices up by about $1 per gallon. A day before the CPI release, the Federal Reserve's preferred inflation gauge will offer a read on price pressures prior to the conflict. Economists expect the core personal consumption expenditures (PCE) price index to have risen 0.4% in February for a third straight month, indicating that the move toward more moderate inflation had already stalled before the fighting began. With the labor market showing signs of stabilizing, inflation proving sticky, and fresh upside risks tied to the Middle East conflict, economists say the Fed may find it difficult to deliver rate cuts this year, making easing in 2026 increasingly unlikely. (Jin Shi)