Inflation report expected to show prices eased before Iran war The U.S. government is set to release its February Consumer Price Index (CPI) report, which is anticipated to indicate a slight slowdown in inflation ahead of the Iran war. Analysts predict that overall inflation will rise by 0.3% from January, with year-over-year inflation remaining at 2.4%. Core inflation, which excludes volatile food and energy costs, is expected to decline to 0.2% month-over-month, down from 0.3% in January. This data, however, was compiled before the U.S. and Israel launched a large-scale attack on Iran on February 28, which significantly disrupted global energy markets. The conflict has led to the near-complete shutdown of the Strait of Hormuz, a critical waterway through which over 20% of the world’s oil supply passes. As a result, U.S. crude oil prices have surged more than 20% since the initial strikes, while retail gas prices have climbed over 50 cents. The war has also intensified uncertainty about the long-term impact on inflation, with experts warning that prolonged disruptions could drive oil prices to unsustainable levels. Bank of America economists noted that the February CPI report should continue to reflect relatively contained inflation, but they emphasized that the evolving geopolitical risks pose a greater threat to price stability. A prolonged conflict could lead to sustained higher oil prices, which would exert upward pressure on both headline and core inflation. JPMorgan Chase’s chief U.S. economist, Michael Feroli, warned that while a moderate oil price spike might not severely harm the economy, a sharp and prolonged increase—particularly if oil prices exceed $100 per barrel—could create a significant drag on growth.#iran_war #strait_of_hormuz #bank_of_america #us_government #jpmorgan_chase
