Get featured

US inflation expected to edge higher before Iran oil shock clouds outlook

US inflation expected to edge higher before Iran oil shock clouds outlook

Reuters poll highlights expectations that February’s US inflation edged up. The estimate points to slightly firmer price growth before the Iran conflict pushed oil and fuel costs sharply higher, leaving March inflation and rate expectations more exposed to energy volatility.

Ahead of the US consumer price index release on Wednesday, March 11, economists polled by Reuters expected CPI to rise 0.3% in February from the previous month, with annual inflation estimated at 2.4%. Core CPI, which strips out food and energy, was expected to rise 0.2% on the month and 2.5% on the year. The day’s breaking line was therefore a market expectation ahead of the release, rather than a confirmed turn in inflation.

Timing is the sharper point. February would be the last major inflation reading compiled before the Iran conflict began to convulse oil markets at the end of the month. Even a modest February figure would therefore describe the cost environment companies were operating in before energy and transport markets moved sharply higher in early March.

That shift is already visible in fuel and crude prices. Reuters reported Brent crude at $87.91 a barrel and West Texas Intermediate at $83.52 on Wednesday after a violent spell of trading that had earlier pushed oil close to $120. AP reported that average US gasoline prices had climbed to $3.54 a gallon, up about 20% in a month, while Reuters separately said national pump prices were already more than 17% higher and above $3.50. For retailers, manufacturers, airlines, and logistics operators, that is now the more immediate inflation risk.

The Federal Reserve is left reading a backward-looking inflation estimate against a much less stable present. Cleveland Fed President Beth Hammack said interest rates are “likely on hold for some time”, reflecting caution about easing policy while inflation risks remain alive. That stance has become harder to interpret because the labour market has weakened at the same time. Reuters reported that the US lost 92,000 jobs in February and the unemployment rate rose to 4.4%, adding another layer of pressure to the Fed’s next decision.

The immediate issue is whether the Iran-driven energy shock starts feeding into freight, inventory, and consumer spending quickly enough to change spring trading conditions. A tame February estimate may steady markets briefly. It does far less to settle what comes next for pricing, demand, and rate expectations if oil and fuel remain elevated through March.

—

BQ

Stories for you —

  • Napier AI adds new AML insights

    Napier AI adds new AML insights

    Napier AI has launched a new AML investigation support capability. Insights AI is designed to give analysts clearer behavioural explanations inside transaction monitoring workflows after sandbox testing with the FCA.

  • How do you talk about layoffs when AI is part of the story?

    How do you talk about layoffs when AI is part of the story?

    Layoff language matters most when technology begins redrawing the contract. At Atlassian, the challenge is not only explaining fewer roles, but explaining why AI changes the skills mix, what retraining could not solve, and how leaders avoid sounding evasive when strategy, headcount, and empathy collide in one announcement to staff.

  • Mattioli Woods reports benefits tech growth

    Mattioli Woods reports benefits tech growth

    Mattioli Woods says demand for benefits technology has accelerated sharply. The company reported 350% growth in client adoption since 2023 as employers modernise platforms ahead of workforce and regulatory change.