One of the biggest concerns around rising oil prices are finally getting reflected in U.S. inflation numbers. Rising energy prices, contributed to a high overall inflation for the month of March, with inflation touching 3.3%., driven largely by rising energy costs that saw a 12.5% increase since the past year.
The Fed has been moving cautiously, trying not to cut interest rates and has held the rates steady so far. But the alarming energy crisis around the Strait and overall oil supply, may push the American central bank to increase interest rates, a strategy to fight uncertainty.
With escalating tensions in the Gulf, supply disruptions have created fresh market volatility, pushing gas prices up across all U.S. states.
A closer look at the data shows that not all components of energy are moving equally.
Soaring gas prices are starting to reflect in the breakdown of energy CPI numbers, which shows that gasoline costs rose by 18.9% since March last year, in comparison to natural gas and electricity.