Inflation roared back to the forefront in March, amplifying consumer anxiety and freezing key parts of the economy just as the Fed signaled it plans to stay on the sidelines.
- Oil prices are elevated, adding pressure across the economy.
- Consumer confidence is weakening, with surveys showing Americans increasingly anxious about the future.
- Gas prices and geopolitical tensions (including the Iran conflict) are major drivers of the consumer mood shift.
- The Fed held rates steady, with meeting minutes showing no urgency to move in either direction.
- Households are spending, but paychecks are not keeping up with costs.
- Labor market signals are mixed: February job losses followed by a solid March rebound.
- Job openings remain high, but employers are filling roles more slowly.
- Mortgage rates climbed to their highest level since last summer, cooling buyer activity.
- Mortgage applications and refinancing both dropped sharply.
- Home price growth slowed to its weakest pace in over a year.
- March CPI hit its highest reading in nearly two years, driven by a historic spike in gasoline prices.
- Energy costs surged, pushing headline inflation higher while core inflation stayed relatively stable.
- Rising gas prices are feeding into transportation, food costs and consumer sentiment.
- With inflation heating up again, the Fed has even more incentive to remain on hold.
For more information on the state of the U.S. Economy, including forecasts, watch all the episodes of the Economy Express series.
