US Inflation Hits 3.8% in April, Highest in Three Years Amid Oil Surge

U.S. inflation surged to 3.8% in April 2026, the highest level in three years.

The spike is driven by soaring gas prices after U.S. and Israeli strikes on Iranian nuclear facilities. The resulting dual blockade of the Strait of Hormuz has pushed Brent crude above $125 a barrel and U.S. gas to $4.23 a gallon.

Markets now price a 59.7% probability of no Federal Reserve rate cuts in 2026, up from 57% a day ago. Analysts say the Fed is likely to prioritize inflation control over monetary easing this year.

Key indicators to watch include upcoming statements from Fed Chair Jerome Powell and Vice Chair Philip Jefferson, along with future CPI data and employment reports. Geopolitical developments around the Strait of Hormuz remain critical.