Fed’s key inflation gauge hits 3.5% as Iran war pushes up gas prices | CNN Business

Fast-rising gas prices lifted the Federal Reserve’s preferred inflation gauge to 3.5% in March, its highest rate in almost three years, new data showed Thursday. The Personal Consumption Expenditures price index rose 0.7% from February, a faster-than-expected acceleration from the previous monthly pace of 0.4%, the Commerce Department reported Thursday. The annual rate of inflation, which jumped from 2.8% in February, is now running at its fastest pace since May 2023. The upswing in inflation was expected. Gas prices rose at record rates in March, aftershocks of the Middle East conflict’s squeeze on the oil trade. Unfortunately, there’s little relief on the horizon: Prices at the pump remained high through April, and an energy shock like this is slowly making its way through other goods and services in the economy. But for Americans already weighed down by years of prices rising faster than they normally do and facing a labor market that’s downshifted in speed, it’s not a welcome development, said Elizabeth Renter, senior economist at NerdWallet. “We’re seeing it in the consumer sentiment data – not only are people feeling the pressure of affordability, specifically