US inflation in March 2026, highest in nearly three years

## Market Snapshot

US GDP growth Q1 2026 market is currently priced at 100% YES for growth being less than 1.0%. The Fed decision for June 2026 shows a 3.6% YES for a rate cut, while July 2026 market reflects an 87.5% YES for no change in rates. This marks significant shifts from previous pricing.

## Key Takeaways

– Market activity suggests a high likelihood of US GDP growth being less than 1.0% for Q1 2026. – Elevated inflation appears to decrease expectations for a Fed rate cut in June 2026. – Persistent inflation may indicate a reduced probability of Fed rate cuts throughout 2026.

## Article Body

The US experienced a substantial inflation rise in March 2026, with annual inflation reaching 3.3%, the largest gain in nearly three years. This increase is influenced by ongoing geopolitical tensions, particularly the conflict with Iran, which has disrupted oil supplies and driven energy prices significantly higher. Gasoline prices surged by 21.2% monthly, contributing to a 12.5% annual increase in energy costs. The conflict has heightened geopolitical risks, leading to greater volatility in global oil markets and impacting headline inflation while core measures remain at 2.6%.

## Market Interpretation

The news of rising inflation is consistent with a scenario where US GDP growth for Q1 2026 is less than 1.0%, suggesting a high impact on this market. Market pricing also indicates that the likelihood of a Fed rate cut in June 2026 is reduced, with a moderate impact observed. Similarly, the sustained inflationary pressures appear supportive of scenarios where no rate cuts occur in 2026, reflecting a moderate impact on this expectation.

## What to Watch

Key indicators to monitor include upcoming data releases such as employment figures and the April CPI report, which could further influence Fed policy expectations. Monitoring developments in the Iran conflict and its effect on oil prices will be crucial, as these factors could significantly impact inflation projections and monetary policy decisions. Additionally, statements from Federal Reserve officials may provide further insights into the likelihood of rate adjustments in the coming months.

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Fed decision june and july bearish

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