Iran War Sends Gas Prices Higher, Lifting U.S. Inflation To 3.8% Annually

April CPI shows annual inflation remains above the Federal Reserve's 2% target, reinforcing a cautious policy backdrop. Energy is the main inflation driver, with the Iran war creating oil supply shocks that are likely to keep price pressures elevated. The combination is modestly negative for risk assets and supports a more hawkish Fed stance.

Analysis

April CPI shows annual inflation remains above the Federal Reserve's 2% target, reinforcing a cautious policy backdrop. Energy is the main inflation driver, with the Iran war creating oil supply shocks that are likely to keep price pressures elevated. The combination is modestly negative for risk assets and supports a more hawkish Fed stance.