Inflation likely surged last month, and not just from the Iran war's spike in gasoline prices.

What To Expect From Tuesday's Inflation Report

Full Bio Diccon Hyatt is an experienced financial and economics reporter. He's written hundreds of articles breaking down complex financial topics in plain language, emphasizing the impact that economic currents would have on individuals' finances and the market. He has a Bachelor's degree in English from the University of Delaware.

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Published May 11, 2026

03:28 PM EDT

Israel Rodriguez's dogs wait for him as fills up his car at a pump at a Loaf N Jug gas station, where gas was $3.80 per gallon without discounts, March 17, 2026 in Pueblo, Colorado.

Rising fuel costs are expected to push up inflation. Michael Ciaglo / For The Washington Post via Getty Images

Key Takeaways

The Consumer Price Index is expected to have jumped 3.8% over the last 12 months in April, amplifying concerns that inflation is threatening the economy and hurting household budgets.
Rising fuel costs are the main source of inflation, since the Iran war has restricted the flow of crude oil to global markets.
Rising inflation could discourage officials at the Federal Reserve from cutting the central bank's benchmark interest rate since inflation is running well over the Fed's 2% target.

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Inflation likely surged last month, and not just from the Iran war's spike in gasoline prices.

A report on the Consumer Price Index from the Bureau of Labor Statistics on Tuesday is likely to show prices rose 3.8% over the year in April. That would be up from a 3.3% annual increase in March if the forecasts from economists surveyed by Dow Jones Newswires and The Wall Street Journalprove true.1

That would be the highest inflation rate since May 2023. The major culprit is expected to be gasoline, which has risen more than $1.50 a gallon since the war began, according to AAA. 2 However, it's not the only rising price.

"The ongoing conflict in the Middle East has kept energy prices elevated, which will start to generate more obvious spillovers into other areas of inflation," economists at Wells Fargo Securities, led by Chief Economist Tom Porcelli, wrote in a commentary.

What This Means For The Economy

Rising inflation due to the Iran war is the latest stumbling block for the economy: It's preventing the Federal Reserve from boosting the economy by cutting interest rates, and could hurt consumer spending as gasoline eats up a greater share of household budgets.

The ongoing closure of the Strait of Hormuz, the vital waterway through which 20% of the world's oil supply usually flows, has pushed up prices for crude oil, fertilizer, and other materials, threatening to reignite inflation that was already under pressure from tariffs.

The surge in diesel fuel prices has pushed up transportation costs for food and other products, which will likely be passed on to customers. The price increases have stressed household budgets and raised concerns among economists that consumers will be forced to cut back on other spending to keep fueling up their vehicles.

Related Education

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What Is the Consumer Price Index (CPI)?](https://www.investopedia.com/terms/c/consumerpriceindex.asp) [ Inflation

Inflation: What It Is and How to Control Inflation Rates](https://www.investopedia.com/terms/i/inflation.asp)

The report is also expected to show core inflation, which excludes the volatile prices for food and energy, rose 2.7% over the year. That would be up from 2.6% in March, reaching a fresh high since September.

Economists generally view core prices as a better guide to inflation's trajectory than the broader index, because food and gas prices can swing up and down for reasons unrelated to inflation, such as weather.

Economists expect core inflation to accelerate in April, partly due to actual price pressures and partly because of a statistical quirk.

Last year's government shutdown forced the bureau to skip collecting data in October, which affected its measurement of housing costs. Forecasters expect the agencies to catch up on the skipped surveys this week, boosting rental costs in the index and slightly lifting core and overall inflation.3

Rising prices are stressing household budgets and have helped plunge consumer sentiment to its lowest on record.

In an April Gallup poll, 31% of U.S. adults said "affordability" was their biggest financial challenge, up from 29% in April 2025, though still below the all-time high of 41% in April 2024.4

Prices also a headache for officials at the Federal Reserve, who have taken cuts to borrowing costs off the table for the time being as inflation fears have eclipsed concerns about the faltering job market. Tuesday's report is expected to reinforce those concerns, as it will show inflation running well above the Fed's 2% annual target.

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