Inflation projected to spike in coming months as energy costs soar

Iran warns it will block oil from Strait of Hormuz

Defense Secretary Pete Hegseth recently said during a news briefing that this Tuesday would be the most intense day yet of U.S. strikes inside Iran. This comes despite President Donald Trump saying on Monday that the "excursion" in Iran will be "short-term" after he laid out plans to implement oil-related sanctions to alleviate price hikes. Rosemary Kelanic, director of the Middle East Program at Defense Priorities, is speaking with LiveNOW's Andy Mac and discusses the potential military capabilities the United States could still use against Iran. 

Inflation is still high in the U.S. amid rising gas prices, and it could get worse if the war against Iran doesn’t end soon. 

Here’s the latest data from the Labor Department: 

February inflation report

By the numbers:

Consumer prices were up 2.4% in February compared with a year ago, remaining above the Federal Reserve’s 2% target. That number could be even higher for March if gas prices continue to jump sharply because of the U.S.-Israeli conflict with Iran. 

RELATED: Iran reportedly warns the world to "get ready" for $200 oil barrels

Grocery prices rose more quickly than in January, and family budgets are feeling the pinch. They rose 0.4% in February and were up 2.4% from a year earlier. Clothing costs jumped 1.3% just in February, likely due to tariffs.

Why you should care:

Fuel prices are set to rise 20% this month, Laura Rosner-Warburton, senior economist at MacroPolicy Perspectives, told The Associated Press. Monthly inflation in March could be the highest we’ve seen in four years, she said. Oil prices could soar to $150 a barrel in the coming weeks if the Strait of Hormuz remains closed, analysts predict. 

High gas prices are listed at Chevron gas station in Los Angeles on March 9, 2026, as gasoline prices surge amid the ongoing war with Iran. (Photo by Frederic J. BROWN / AFP via Getty Images)

The national average for regular gasoline in the U.S. was $3.58 a gallon Wednesday, according to AAA, up roughly 20% just in one month.

The price hike could slow consumer spending, which drives two-thirds of the nation’s economic growth.

RELATED: Here's what most Americans say the country's top problem is – and it's a familiar one

Timeline:

Prices could go down if the war ends soon, but it’s unclear when that may happen. Trump said Wednesday that the conflict will be a "short-term excursion," but he’s also threatened more attacks and there’s no sign of letting up. 

What's next:

The Federal Reserve’s preferred inflation measure, which puts less weight on things like rents, will be released Friday. Analysts say it’s likely to report higher inflation than the Labor Department’s numbers. 

World reacts to US-Israel war on Iran

Reaction continues to come in from countries across the world as the US continues its Operation Epic Fury against Iran, now in day 12. Aarathi Krishnan joined LiveNOW's Carel Lajara to discuss the latest developments.

Will the Fed cut interest rates again? 

Dig deeper:

The latest inflation report makes it almost certain that the Federal Reserve will keep interest rates unchanged when it meets next week. The Fed is already deeply divided over whether it needs to keep interest rates at about 3.6% to push inflation down, or whether it should reduce the rate to support borrowing, spending, and hiring.

RELATED: US employers unexpectedly cut 92,000 jobs in February, unemployment slightly higher at 4.4%

Last Friday, the government reported unexpectedly sharp job losses for February as employers slashed 92,000 jobs. The unemployment rate ticked up to 4.4%.

What they're saying:

"That’s always the worst-case scenario for the central bank," Austan Goolsbee, president of the Federal Reserve Bank of Chicago, said on Bloomberg Friday. "As we get more uncertainties, I kind of think that the time at which it makes sense to act keeps getting pushed back."