Inflation Spikes to Highest in Nearly Two Years

The Consumer Price Index (CPI) increased a massive 0.9% in March, driven largely by rising energy prices, and is up 3.3% over the past year – putting CPI inflation at its highest point in nearly two years.

Meanwhile, the Personal Consumption Expenditure (PCE) Price Index increased by a high 0.4% in February – even before the spike in energy prices – and is now up 2.8% over the past year. This is well above the Federal Reserve’s target rate of 2.0%, and likely to rise much more once March data is incorporated.

If PCE inflation continues at its current core trend, it will total 4.3% in 2026 – and could be larger due to the recent spike in energy prices. If CPI inflation continues at its current core trend, it totals 3.5% in 2026.

The Committee for a Responsible Federal Budget will continue tracking inflation, interest rates, and other fiscal and economic metrics in the coming months.