Sharp rise in fuel prices pushes US inflation to highest level in nearly two years, raising pressure on households and policymakers.

Inflation in the United States rose sharply in March, government data showed on Wednesday, as higher energy prices linked to the war in the Middle East placed additional strain on consumers.

The increase has intensified political pressure on President Donald Trump, who has ordered peace talks with Iran and is also preparing for mid term elections in November.

The annual inflation rate climbed to 3.3 percent in March, up from 2.4 percent in February, according to the US Bureau of Labor Statistics.

Gasoline prices surged by 21.2 percent between February and March, the largest monthly increase since records began in 1967, the Bureau of Labor Statistics said.

Markets had largely expected the spike, according to consensus forecasts published by MarketWatch.

The United States and Israel began bombing Iran on February 28, prompting Tehran to disrupt shipping through the Strait of Hormuz, a key route for about a fifth of global oil and gas supplies.

Although the US is a major oil producer, it still experienced the impact of rising global crude prices, which quickly pushed up costs at the pump.

The average price of regular gasoline in the US now stands at about 4.15 dollars per gallon, compared with roughly 3 dollars before the conflict began.

The Trump administration, which campaigned on a pledge to reduce inflation, has said the price shock is likely to be temporary.

Reacting to the data, White House spokesperson Kush Desai said the US economy remains on a solid trajectory.

Economic adviser Kevin Hassett pointed to declines in the prices of eggs, beef and concert tickets, highlighting selective signs of easing inflation pressures.

US Vice President JD Vance said he hoped for a positive outcome as he departed Washington for US Iran peace talks in Pakistan this weekend.

However, economists warned that further economic strain is likely, particularly for middle and lower income households already affected by higher energy and travel costs.

Heather Long, chief economist at Navy Federal Credit Union, said inflation had surged to its highest level in almost two years and warned that more increases were likely.

“This is only the beginning. Food prices, travel and shipping costs are all going up in April and will exacerbate the pain,” she said.

Christopher Low of FHN Financial said fuel costs were a major driver of the inflation jump, noting that shipping disruptions in the Strait of Hormuz were still ongoing.

He added that the ceasefire appeared fragile, with limited shipping traffic continuing through the key waterway.

Some economists estimate that the rise in oil prices could cost US households around 350 dollars each.

Consumer sentiment also fell sharply this month, dropping by 11 percent according to a University of Michigan survey.

At its most recent meeting in mid March, Federal Reserve Chair Jerome Powell warned that the conflict could delay progress in bringing inflation back to target.

The Federal Reserve aims for 2 percent inflation, a level it has not consistently achieved in five years due to shocks including the Covid pandemic, the war in Ukraine and trade tariffs.