March CPI Surges to 3.3% as Iran War Energy Shock Hits US Consumers — Gas Prices +21.2%, Largest Monthly Jump Since 1967

The Bureau of Labor Statistics released the March 2026 Consumer Price Index on April 10, revealing the first full month of price data since the US-Israel-Iran conflict began on February 28. Headline CPI surged to 3.3% year-over-year — up sharply from 2.4% in February — driven almost entirely by an energy price explosion. The monthly change was +0.9%, the largest single-month increase in two years. The energy index rose 10.9% in March; within energy, gasoline soared 21.2% — the largest single-month increase since 1967. Brent crude had peaked at approximately $118–120 per barrel by late March (from ~$72 before hostilities began), before the April 7 ceasefire sent prices back toward $94. The core CPI (excluding food and energy) rose just +0.2% monthly and +2.6% year-over-year — both 0.1 percentage point below consensus forecasts — providing a crucial bright signal amid the headline noise. The March data establishes that the Iran war's energy shock was the dominant inflationary driver for Q1 2026, while tariff pass-through from the April 2 Liberation Day anniversary expansion has not yet fully materialized in consumer prices. Economists at JPMorgan and Morningstar estimated tariff pass-through would add approximately 50 basis points to headline inflation between April and October 2026. The 10-year Treasury yield held at 4.31% — recovering from the 4.46% peak of the prior week. Markets interpreted the core miss favorably: the Nasdaq and S&P 500 held positive territory even as the Dow fell 269 points (-0.56%) on industrial and transportation sector concerns. The Fed's stagflation bind deepened further: with headline CPI at 3.3% and core at 2.6% (both above its 2% target), the FOMC had no room to cut rates at its April 29–30 meeting even as GDP was decelerating toward potential contraction.