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U.S. inflation accelerated to 3.3% in March, lifted by a sharp jump in energy costs after disruption in the Strait of Hormuz pushed gasoline prices up 21.2% in a single month.
The latest data from the U.S. Bureau of Labor Statistics shows inflation climbing from 2.4% in February, with fuel costs leading the increase. Gasoline posted its steepest monthly rise since 1967, sending average prices to $4.15 per gallon, up from about $3 before the war.
The surge followed late-February strikes by the United States and Israel on Iran, which triggered Tehran’s move to block traffic through the strait, a key route that typically carries around a fifth of global oil and gas shipments.
Following Trump’s announcement of a two-week ceasefire, under which Iran was expected to reopen the strait for safe passage, tanker traffic has resumed only marginally, keeping global energy supply constrained.
Uncertainty continues to surround upcoming talks in Pakistan, where officials aim to turn a two-week truce into a lasting agreement and fully reopen the critical shipping route.
Vice President JD Vance, departing Washington for talks with Iran in Pakistan, expressed hope for a "positive" outcome as negotiators attempt to extend a fragile ceasefire.
The spike in inflation adds pressure on President Donald Trump, who entered office pledging to curb rising prices and now faces mid-term elections in November.
The Federal Reserve had already warned that the war could complicate efforts to bring inflation back toward its 2% target. Chair Jerome Powell indicated in March that renewed geopolitical tension risks slowing that progress.
Markets reacted cautiously to the data, which came in line with expectations but failed to lift sentiment. U.S. stocks traded mixed, while oil held just under $100 per barrel on tentative ceasefire optimism.
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