April’s hot inflation reading isn’t going to change the Federal Reserve’s dire outlook for interest-rate cuts in 2026 but it will make incoming Fed Chair Kevin Warsh’s job tougher during his first year leading the world’s most powerful central bank.

Consumer prices heated up in April, the second month of the Iran war, solidifying that the Federal Reserve will hold interest rates for now and will also be on watch for higher energy costs creeping into other prices — a potential catalyst for rate hikes.

Inflation rose 3.8% over 12 months in April, the highest since May 2023 and in line with forecasts. The Iran war has spiked gasoline prices, pushing up the overall inflation rate. "Core" inflation outside of food and gas prices rose 2.

The Consumer Price Index is the most commonly used measure of inflation in the United States. The CPI for all items increased by 0.9% in March 2026, on a seasonally adjusted basis, as reported by the U.

CPI gas price index has surged 28% from a year ago, while overall energy costs are up nearly 18%, new inflation data shows.

By Lucia Mutikani WASHINGTON, May 12 (Reuters) - U.S. consumer inflation increased further in April, with the annual rate posting its largest gain in three years, heightening political risks for President Donald Trump and his Republican party ahead of November's midterm elections.

Gasoline prices surged as the Iran conflict ripples through the economy, pushing April inflation to the highest level since late 2023.

The Consumer Price Index is expected to have jumped 3.8% over the last 12 months in April, amplifying concerns that inflation is threatening the economy and hurting household budgets. Rising fuel costs are the main source of inflation,