So here's what happened with inflation in March: it went up. A lot. The Consumer Price Index jumped 0.9% from February, which is the biggest monthly increase we've seen in nearly four years. And if you're wondering why, look no further than your gas bill. Energy prices spiked over 10.9% in a single month, almost entirely because of the war in Iran.

On an annual basis, things look even more dramatic. The inflation rate soared from 2.4% in February to 3.3% in March. That's the highest it's been since May 2024.

Now, here's the interesting part. If you strip out the volatile food and energy components—what economists call "core" inflation—things look a bit calmer. Core CPI rose just 0.2% month-over-month, which was actually below the 0.3% consensus estimate. Year-over-year, core inflation ticked up to 2.6% from 2.5% in February, still below expectations of 2.7%.

But here's the problem for the Federal Reserve: 2.6% is still above their 2% target. And when you combine that with the headline number being driven by a geopolitical shock, it means the Fed has basically no room to cut interest rates right now. They're stuck watching from the sidelines as external forces push prices higher.

This is a developing story…