The U.S. core inflation rate, which excludes volatile food and energy prices, rose to 2.6% for the 12 months ending in March 2026. This is a slight increase from the 2.5% recorded in both January and February 2026.
Latest Core Inflation Data (March 2026)
- Annual Core CPI: 2.6% (up from 2.5% in February)
- Monthly Core CPI: 0.2% (unchanged from the February monthly increase)
- Annual Core PCE: 3.0% as of February 2026 (the Federal Reserve's preferred gauge)
Recent Trends and Market Impact
- Shelter Costs: The heavyweight shelter index has remained a primary driver, increasing at a steady 3% annual pace recently.
- Energy and War Effects: While core inflation excludes direct energy costs, recent price surges due to the war in Iran (e.g., gasoline exceeding $4 per gallon) are starting to "pass through" into core services like airline fares, which jumped 14.9% year-over-year in March.
- Federal Reserve Stance: Despite core inflation remaining above the 2% target, policymakers have generally held interest rates steady, waiting to see if recent energy-driven spikes are temporary.
Summary Table: Expectations vs. Reality
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