U.S. consumer inflation seen rising further in April amid Iran war
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- Consumer Price Index is projected to rise 0.6% in April, down from 0.9% in March.
- Annual CPI is expected to increase 3.7% over the 12 months through April, the largest year‑on‑year gain since September 2023.
- Rent data adjustment, a one‑time correction after last year’s government shutdown, is driving the underlying inflation rate acceleration.
- Oil prices have surged amid the U.S.-Iran conflict, lifting gasoline, diesel and jet fuel costs, which feed into the CPI.
- Federal Reserve kept its benchmark overnight rate unchanged at 3.50‑3.75% last month and markets anticipate rates will stay steady through 2027.
Why it matters: Higher gasoline and rent costs squeeze consumers' wallets, while the Fed’s rate‑hold stance preserves borrowing costs for borrowers but fuels political pressure on President Trump ahead of midterms.
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