U.S. wholesale prices surged last month as the Iran war drove up the cost of energy. Excluding volatile food and energy prices, core producer prices rose a modest 0.1% from February and 3.8% from a year earlier. The gains in wholesale prices were smaller than economists had forecast. The surge in prices complicates the work of the inflation fighters at the Federal Reserve, who have faced intense pressure from President Donald Trump to lower their benchmark interest rate. Some Fed policymakers are inclined to raise rates instead, as higher energy costs increase the inflation threat. Food prices fell by 0.3% in March after surging by 2.4% in the previous month. The Labor Department reported that soaring gasoline prices pushed consumer prices up 3.3% last month from a year earlier. The International Energy Agency forecast that the war in Iran will lead to an annual decline in oil demand for the first time since the pandemic. Oil demand is expected to decrease by an average of 80,000 barrels a day this year. The IEA expects a decline in demand of 1.5 million barrels in the current quarter.
