Rising gasoline prices led to inflationary pressures, with prices rising 5.5% in April
Published May 28, 2026
The ongoing U.S.-Israel war against Iran has fueled soaring energy prices, causing U.S. inflation to rise at the fastest pace in three years.
Personal consumption spending, which the Federal Reserve recommends for assessing inflation, rose 3.8% in April from a year earlier, following a 3.5% increase in March, according to a report from the Commerce Department’s Bureau of Economic Analysis released Thursday.
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On a month-on-month basis, the PCE (Personal Consumption Expenditure Price Index) increased by 0.4% in April, following a 0.7% increase in March.
Overall, commodity prices rose by 0.7%. Gasoline pumps were the biggest riser, with prices rising 5.5% as tensions with Iran strained global energy markets. The average price for a gallon of gasoline was $4.42, up from $4.17 at this time last month and up from $2.98 a gallon on February 28, when the United States and Israel attacked Iran.
Food prices also rose 0.5%, the biggest monthly increase since November 2022.
Housing and utility costs also rose by 0.6%. Personal consumption also increased by 0.5%, following a 1% increase in March. More consumers are tapping into their savings, with savings rates dropping 2.6% last month.
Federal Reserve Pressure
Rising inflation is putting pressure on the Federal Reserve ahead of the central bank’s first policy meeting under new Chairman Kevin Warsh, scheduled for June 16-17. The central bank is tracking PCE inflation towards the 2% target.
“Inflation conditions are becoming increasingly uncomfortable for the Fed,” Olu Sonora, head of U.S. economics at Fitch Ratings, told Reuters. “Price pressures are likely to persist for months to come, and while the Fed cannot resolve supply shocks, it cannot ignore the shocks that are impacting underlying inflation.”
The central bank is widely expected to maintain a range of 3.50-3.75% through 2027. A recent analysis from JPMorgan Chase & Co. suggests that interest rates will remain stable until mid-2027, when rates are expected to rise rather than cut.
That was reflected in the minutes of the central bank’s April 28-29 meeting, which showed policymakers leaning toward raising interest rates.
US markets are trending higher despite reports showing rising inflation. The Nasdaq was up 0.6% and the S&P 500 was up 0.5%, while the Dow Jones Industrial Average was nearly flat and up just 0.05% in midday trading.
The White House did not respond to Al Jazeera’s request for comment.
