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Gasoline surge pushes March inflation higher amid Iran-related price pressures
36 minutes ago•Source: Axios
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U.S. consumer confidence sinks to record low as inflation fears rise amid Iran conflict
The University of Michigan’s April survey shows U.S. consumer sentiment dropping to a record low (index 47.6) with one-year inflation expectations rising to 4.8%. Analysts attribute the decline to worries about energy prices tied to the Iran conflict, noting most interviews were completed before the April 7 ceasefire; sentiment could improve if supply disruptions ease and gas prices moderate.
Energy surge lifts March CPI as core inflation remains restrained
March CPI rose 0.9% to 3.3% year over year, led by a 21.2% spike in gasoline and a 10.9% jump in energy from the Iran conflict; core CPI gained 0.2% for the month and 2.6% annually, signaling contained underlying inflation, with pockets of price declines in medical care, personal care, and used cars. Services excluding energy rose 0.2% and shelter 0.3%. Energy pressures eased in April after a U.S.–Iran cease-fire, and markets expect the Fed to remain patient while watching the broader inflation path toward its target.
West Virginia electric bills soar past mortgages amid rising energy costs
In West Virginia, fixed-income households are facing electric bills that can exceed mortgage payments as overall energy costs rise, driven by aging coal plants, infrastructure upgrades, and gas-price volatility; many residents blame policy choices and unfulfilled Trump promises to cut energy costs, amid broader nationwide rate hikes and concerns over data centers driving demand.
February 2026: Spending Rises as Income Edges Down
US personal income fell 0.1% in February 2026 (-$18.2B), with disposable income down 0.1% (-$18.3B), while personal consumption expenditures increased 0.5% (+$103.2B), boosting total personal outlays by 0.5% (+$106.5B). Personal saving reached $931.5B (4.0% saving rate). The income drop was mainly due to lower personal dividend income and fewer transfer receipts, even as compensation rose. The PCE increase was split between goods (+$58.7B) and services (+$44.5B); real PCE rose 0.1%, and the PCE price index climbed 0.4% (0.4% excluding food and energy). Year over year, PCE prices were up 2.8% (3.0% ex food and energy). BEA notes data revisions and ongoing improvements; the next release is April 30, 2026, at 8:30 a.m. ET.
IMF Warns Iran War Will Leave Permanent Global Growth Scars, Even With Peace
IMF chief Kristalina Georgieva says the Iran war will permanently scar global growth, pulling down forecasts due to energy disruptions, damaged infrastructure, and lost confidence—even if a durable peace is reached—striking poorer and oil-importing nations hardest and urging targeted support and prudent fiscal/monetary policy.
Iran Conflict Sparks Fresh Inflation Pressure Ahead of CPI
The upcoming March CPI is expected to show inflation around 3.3% annually, the highest since May 2024, driven by a surge in energy costs tied to the Iran war, with economists warning inflation could top 3% in March and exceed 4% by April, signaling ripple effects on groceries, travel, and borrowing costs as the Fed remains cautious on policy.
Trump Tax Law Mostly Benefits the Rich, With Caps Limiting Tip Earners' Relief
NBC News reports that while many Americans saw larger tax refunds under Trump’s tax law, the gains are heavily skewed toward the wealthy. Provisions like a broad expansion of the estate tax, 100% bonus depreciation for business purchases (including jets), and other cuts disproportionately favor high earners, with about 60% of savings going to households over $217,000. At the same time, cap on tip deductions (up to $25,000) and limits on overtime and Social Security deductions mean many middle- and lower-income workers see only modest relief or higher costs elsewhere. Some older adults benefit from a $6,000 deduction, but benefits vary by income and family structure, raising concerns about rising inequality even as the White House markets the law as “working family tax cuts.”
Milder Q4 2025 GDP Gain Highlights Consumer Strength Amid Investment Slowdown
BEA’s third estimate shows U.S. real GDP rising 0.5% at an annual rate in Q4 2025, revised down 0.2 percentage point from the second estimate due mainly to weaker investment. Growth was supported by higher consumer spending and investment but weighed down by declines in government spending and exports, with imports also subtracted. Private services-producing activity rose 2.3%, while government (-7.8%) and private goods-producing (-1.8%) fell; wholesale trade, information, and health care and social assistance were key contributors. Real final sales to private domestic purchasers rose 1.8%; real gross output fell 0.5%. Corporate profits climbed about $247 billion in Q4. For 2025 overall, real GDP rose 2.1% and personal income grew 4.9%, with gains across states; Hawaii benefited from Maui wildfire settlement transfers, while DC lagged. The release notes that the October 2025 government shutdown shaved roughly 1.0 percentage point from Q4 growth and that October CPI data were imputed. Next BEA update is April 30, 2026.
Core inflation remains at 3% as pre-war data show softer demand and slower growth
February core PCE rose 3% and headline inflation 2.8%, while consumer spending fell 0.1% and personal income rose 0.4%. GDP for Q4 was revised down to 0.5% growth (down from 0.7%), driven by weaker investment and lower real final sales. The report suggests stagflation pressures even before the Iran conflict boosts energy prices, with Fed officials expected to keep rates on hold as inflation remains above target.
Stablecoin Yield Ban Would Offer Little Shield to Bank Lending, White House Says
A White House analysis finds that prohibiting yields on stablecoins would have only a modest impact on bank lending. Baseline results show removing stablecoin yield increases lending by about $2.1 billion with a net welfare cost of $800 million (0.02% lending rise; 6.6 to 1 cost-benefit). Large banks would supply about 76% of the new lending, with community banks around 24% (~$500 million, 0.026%). Even under extreme, implausible assumptions, aggregate lending rises to at most $531 billion (4.4%), only if the stablecoin market expands sixfold and the Fed rethinks its monetary framework; community banks could still gain up to $129 billion (6.7%). The report concludes the yield ban would do little to protect bank lending while sacrificing potential consumer benefits from competitive yields.