US inflation soars in March as war on Iran drives economy into uncertainty

US March CPI jumped 0.9% m/m and 3.3% y/y, the sharpest rise in nearly two years, as the Iran conflict fed through higher energy and supply-chain costs. The print comes alongside firmer oil — still about 10% above pre-conflict levels and nearly 30% up year to date — while the Fed is left balancing renewed inflation pressure against a labor market that added 178,000 jobs and saw unemployment ease to 4.3%. The report also points to broader cost-push pressure: ISM’s prices index surged from 63 in February to 70.7 in March, the biggest one-month gain in 13 years, while Q4 2025 GDP was revised down to 0.5% from 1.4%. That combination of weaker growth and hotter inflation raises stagflation concerns and increases the odds of a more hawkish Fed reaction if price pressures persist. For precious metals, the setup is supportive on the margin for gold as a geopolitical/inflation hedge, but higher inflation alone could also keep real-rate expectations volatile. Near term, traders will watch whether the ceasefire and reopening of the Strait of Hormuz actually cool energy prices, and whether upcoming Fed commentary leans toward rate hikes or simply a prolonged higher-for-longer stance.