Inflation in the United States rose sharply in March, according to official data released on Wednesday, as higher energy costs linked to the war in the Middle East placed significant pressure on consumers.
The nationwide surge in prices has intensified pressure on President Donald Trump, who has initiated peace talks with Iran and is preparing for mid-term elections in November.
The inflation rate climbed to 3.3 per cent year-on-year in March, the US Bureau of Labor Statistics (BLS) reported. This marks a notable rise from 2.4 per cent recorded a month earlier.
Petrol prices surged by 21.2 per cent between February and March — the sharpest monthly increase since records began in 1967, the BLS added.
Excluding volatile food and energy costs, inflation edged up to 2.6 per cent, compared with 2.5 per cent in February.
Markets had largely anticipated the increase, according to estimates published by MarketWatch.
The spike follows escalating tensions in the Middle East, after the United States and Israel launched strikes on Iran on 28 February. Tehran responded by restricting traffic through the Strait of Hormuz, a key route for roughly one-fifth of global oil and gas shipments.
Despite being the world’s largest crude oil producer, the United States has also felt the impact, with average petrol prices rising to about $4.15 per gallon, compared with roughly $3 before the conflict.
The administration has maintained that the economic disruption will be temporary. Vice President JD Vance expressed optimism about a “positive” outcome as he travelled for US-Iran peace talks in Pakistan.
However, economists have warned of further economic strain, particularly for middle- and lower-income households already grappling with rising energy and travel costs.
Heather Long, chief economist at Navy Federal Credit Union, said inflation in March reached its highest level in nearly two years.
“This is only the beginning. Food prices, travel and shipping costs are all going up in April and will exacerbate the pain,” she said.
Christopher Low of FHN Financial also noted that rising fuel prices were a key driver of inflation, adding that limited traffic through the Strait of Hormuz continues to disrupt supply.
When Trump returned to office in January 2025, inflation had been declining from earlier highs recorded in 2022, driven in part by the Russia-Ukraine War.
By April 2025, inflation stood at 2.3 per cent year-on-year, around the time the administration introduced higher tariffs on imported goods.
Although price growth eased later in the year, largely due to stable fuel costs, recent developments have reversed that trend.
During its March meeting, the Federal Reserve warned that the conflict could delay progress towards its two per cent inflation target.
The central bank has struggled to meet this goal over the past five years due to successive shocks, including the COVID-19 pandemic, the war in Ukraine, and ongoing trade tensions.