Business & Economy

Inflation spiked as Iran war raged

by Sylvan Lane - 04/30/26 6:42 PM ET

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by Sylvan Lane - 04/30/26 6:42 PM ET

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Welcome to The Hill’s Business & Economy newsletter

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Business & Economy

The Big Story

Inflation hit 3.5 percent in March as Iran war drove prices higher

Prices grew at a far faster rate in March as the war in Iran drove a significant increase in inflation, according to data released Thursday by the Commerce Department.

The annual inflation rate in March rose to 3.5 percent, as measured by the personal consumption expenditures (PCE) price index, up from 2.8 percent in February. Without food and energy prices, which have spiked amid the war in Iran, the annual inflation rate last month was 3.2 percent.

Prices also jumped 0.7 percent last month alone, up from a 0.4 percent increase in February, according to the Commerce Department.

The PCE price index is the Federal Reserve’s preferred measure of inflation. The March annual inflation rate of 3.5 percent is far above the Fed’s target of 2 percent annual inflation.

The new inflation data was in line with the expectations of economists, who have warned about the steep toll the Iran war could take on the U.S. economy.

President Trump and Republicans, who are already facing intense criticism over their handling of the economy, are likely to face even more pressure from the spike in price growth.

Welcome to The Hill’s Business & Economy newsletter, I’m Sylvan Lane — covering the intersection of Wall Street and Pennsylvania Avenue.

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