Economists have indicated that the sudden increase in gasoline prices felt by U.S. consumers will be prominently reflected in the key inflation data to be released this week. According to Jin10, the U.S. Consumer Price Index (CPI) for March is expected to rise by 1% month-on-month, marking the largest single-month increase since 2022. The core CPI is anticipated to increase by 0.3% month-on-month. Previously, the Iran conflict led to a rise of approximately $1 per gallon in gasoline prices at U.S. gas stations.

On the day before the CPI data release, the Federal Reserve's preferred inflation measure will provide insights into pre-conflict price pressures. Economists expect the core Personal Consumption Expenditures (PCE) price index to have risen by 0.4% in February for the third consecutive month, indicating that the process of inflation easing to more moderate levels had already stalled before the conflict began.

The combination of signs of stabilization in the U.S. labor market, persistent price pressures, and new inflation risks from the Middle East conflict helps explain why the Federal Reserve may find it challenging to lower interest rates this year.