US Inflation Rises to 3.8% as Iran War Drives Energy Costs
US prices rose in April at their fastest rate since May 2023.
A Sharp Rise in Prices
The impact of the war in Iran is now being felt by consumers. The consumer price index (CPI) jumped to 3.8%.That is the highest level since inflation hit 4% three years ago. The Bureau of Labor Statistics (BLS) said almost half of the rise was driven by surging energy costs. Housing and food costs also contributed.
Gas Prices Surge
The US-Israel war in Iran has led to a jump in oil prices. The key Strait of Hormuz shipping lane is effectively closed. As a result, the price of gas in the US has surged.The national average for a gallon of unleaded is now $4.50. That is the highest level since July 2022. The data comes from the AAA motoring group.
Interest Rate Cuts Unlikely
The rise in April’s inflation figure is up from 3.3% in March. This makes it increasingly unlikely that the Federal Reserve will cut interest rates this year. Isaac Stell, investment manager at the Wealth Club, said the inflation increase even leaves possible interest rate hikes “firmly on the table”.
