US Inflation Hits 3.3% in March 2026, Highest in Nearly Three Years

The U.S. inflation rate climbed to 3.3% in March 2026, the highest annual gain in nearly three years, driven largely by geopolitical tensions with Iran disrupting global oil supplies.

Gasoline prices surged 21.2% from the previous month, contributing to a 12.5% annual increase in energy costs. Core inflation, excluding food and energy, remains at 2.6%.

The persistent inflationary pressure is now reshaping expectations for Federal Reserve policy. Prediction markets show a 3.6% probability of a rate cut in June 2026 and an 87.5% probability of no change in July 2026. Market pricing also suggests a 100% likelihood that U.S. GDP growth in the first quarter of 2026 fell below 1.0%.

Analysts are watching the April CPI report, upcoming employment data, and any further escalation of the Iran conflict for signals on future monetary policy.