Fed’s key inflation gauge hits 3.5% as Iran war pushes up gas prices

Fast-rising gas prices lifted the Federal Reserve’s preferred inflation gauge to 3.5% in March, its highest rate in almost three years, new data showed Thursday. The Personal Consumption Expenditures price index rose 0.7% from February, a faster-than-expected acceleration from the previous monthly pace of 0.4%, the Commerce Department reported Thursday. The annual rate of inflation, which jumped from 2.8% in February, is now running at its fastest pace since May 2023. The PCE Price Index is the inflation gauge the Federal Reserve uses for its 2% target rate. The sharp hike in energy prices, an aftershock of the Middle East...