Here’s the inflation breakdown for February 2026 — in one chart

“I don’t get any sense that inflation is decelerating,” mentioned Mark Zandi, chief economist at Moody’s. “It feels like it’s uncomfortably and persistently high.”

Inflation is “stubbornly high, especially for necessities” equivalent to electrical energy, meals, attire, medical care and housing, he mentioned.

“And of course, this is all before the fallout from events in the Middle East,” he mentioned.

The newest CPI report would not account for the inflationary impact of rising energy prices in the aftermath of the US-Israel assaults on Iran, which started Feb. 28.

In that sense, the CPI report is “a bit stale at this point,” mentioned Joe Seydl, senior markets economist at JP Morgan Private Bank.

“It’s not incorporating what is the most important [macroeconomic] shock right now,” he mentioned.

It’s unclear how a lot the struggle in Iran will add to inflation in the US economic system.

The struggle has prompted international oil costs to spike — main costs for gasoline, diesel, jet gasoline and different refined merchandise from crude oil to surge, too.

That’s as a result of the battle has choked off oil provide via the Persian Gulf, a significant hall for international vitality exports — amounting to the biggest oil supply disruption in history.

Brent Crudea world oil value benchmark, touched $119.50 per barrel on Monday, up from about $70 per barrel earlier than the US-Israeli assaults. It’s since declined from its current peak, to round $90 per barrel.

A protracted disaster could lead on oil costs to remain elevated, resulting in sustained ache at the gasoline pump for customers, economists mentioned.

Average fuel costs hit $3.50 per gallon as of Mondaytheir highest degree since 2024, in line with the US Energy Information Administration. Prices are up about 57 cents a gallon — or 19% — from $2.94 a gallon on Feb. 23, two weeks earlier.

Households may additionally see costs rise elsewhere, economists mentioned.

For instance, increased jet gasoline prices may filter into increased airfares forward of the busy spring and summer time journey seasons; dearer diesel may feed into elevated meals costs on account of elevated prices to move meals gadgets to the grocery retailer, economists mentioned.

A protracted battle that results in a sustained improve in inflation would additionally complicate the Fed’s rate of interest coverage, economists mentioned.

“I think the Fed sits on its hands and doesn’t move,” Zandi mentioned. “In significant part because of the uncertainty created by the war.”

The final influence depends upon how lengthy the battle drags on, and to what extent it disrupts vitality provides from the Middle East, Seydl mentioned.

The almost certainly state of affairs is a “severe but short-lived” battle that lasts only a few weeks, and sees US oil prices steadily drop again to round $60 by the finish of 2026 — roughly the place they have been earlier than the battle, Stephen Brown and Thomas Ryan, North America economists at Capital Economics, wrote in a analysis word on Tuesday.

However, an extended battle that inflicts minor injury to vitality infrastructure could lead on US oil costs to common about $100 per barrel for the remainder of the 12 months, Brown and Ryan wrote. In this case, CPI inflation would rise to three.5% by the finish of 2026, up from the present 2.4% forecast, they estimated.

In that case, gasoline costs may rise to simply shy of $5 per gallon in the second quarter, they wrote. CPI inflation for airline fares may rise from 2.2% in January to a peak of round 20% on account of jet gasoline prices, they wrote.

Additionally, agriculture costs can be “most at risk” relative to different commodities if there have been a sustained rise in costs for oil and for global natural gaswhich is a key enter for fertilizer, Brown and Ryan wrote.

Disruptions to fertilizer provide would threat a shortfall in US crops, Zippy Duvall, president of the American Farm Bureau Federation, wrote Monday in a letters to President Donald Trump.

“Not only is this a threat to our food security — and by extension our national security — such a production shock could contribute to inflationary pressures across the US economy,” Duvall wrote.

Before the struggle in Iran, tariffs that Trump imposed have been the primary issue underpinning elevated inflation, economists mentioned.

“It’s primarily tariffs, in our view,” mentioned Seydl of JP Morgan.

Without the “tariff shock” of 2025, the US inflation charge would seemingly be again to focus on, he mentioned.

The Supreme Court struck down a centerpiece of the Trump administration’s tariff agenda in February, ruling that tariffs levied beneath the International Emergency Economic Powers Act of 1977 have been unlawful.

Trump cited IEEPA as the authorized spine for a number of tariffs he placed on imports from different nations, together with a ten% baseline tariff on all US buying and selling companions and even increased duties on choose nations.

Shortly after the ruling, the Trump administration launched new tariffs beneath a separate authorized justification, aiming to maintain the efficient tariff charge roughly equal to what it had been earlier than the Supreme Court ruling.

Economists mentioned there would not be a lot inflationary reduction for customers in the brief time period consequently.

For instance, earlier than the court docket ruling, the common efficient tariff charge was 14.3%, the highest since 1939, in line with the Yale University Budget Lab. The present tariff charge, after the Trump administration’s newest maneuver, is 10.5%, the highest since 1943, in line with a March 9 analysis.

Overall CPI inflation additionally seems higher on paper than in actuality on account of a quirk in the information from the authorities shutdown in the fall.

The record-long shutdown, which ran from Oct. 1 to Nov. 12, prevented federal statisticians from amassing typical inflation information in October. Without that information, the BLS assumed that no value will increase had taken place throughout the month for most classes of products and companies.

Taking that measurement quirk into consideration, CPI inflation is probably going round 2.7%, about 0.3 share factors increased than reported Wednesday, mentioned Zandi of Moody’s.