A key US inflation measure rose 3.5% year-on-year in March — its steepest increase in nearly three years — as the ongoing war in Iran sent gas prices surging roughly 21% in a single month, pushing the national average to $4.30 per gallon. The Federal Reserve (the US central bank), which targets 2% annual inflation, is now expected to hold interest rates steady for months, with outgoing Chair Jerome Powell acknowledging the direct burden on households. Economists warn the energy shock is siphoning consumer spending away from other goods and services, with one leading forecast cutting US economic growth for 2026 from 2.4% to just 1.7%.