US Import Prices Increase Below Expectations; Sharp Rise Anticipated due to Iran War

• U.S. import prices rose 0.8% in March, below expectations for a 2.0% rise, though economists expect the full impact of the oil price surge from the U.S.-Israeli war with Iran to show in April's data.
• It was stated that this most likely reflects ‌timing differences between when the oil that entered U.S. ports was shipped and the spot price of oil. Moreover, the average crude oil price arriving in the United States in March was up 7.8% compared to Brent price, which was up by 45.5%. Therefore, the bulk of the March oil price increase has yet to show up in this report.
• In the 12 months through March, import prices shot ​up 2.1%. That was the largest year-on-year rise since December 2024, and followed a 1.0% increase in February. "Whether it is higher shipping costs from supply disruptions or foreign manufacturers no longer offsetting the tariffs with their own ​product price cuts, import price inflation is on its way up, and then adding insult to injury, once the ships dock here, the imported goods are hit with the tariffs," said Christopher Rupkey, chief economist at FWDBONDS. "The consumer is losing, and will continue to lose."
• Core PCE inflation was estimated to have advanced 3.2% in the 12 months through March, which would be the largest gain in two years, with the Federal Reserve tracking PCE price indexes for its 2% inflation target.
• Financial markets are pricing in roughly a one-in-three chance of a rate cut this year, while minutes of the Fed's March 17-18 meeting showed a growing group of policymakers felt that rate hikes might be needed.

(Source: Reuters)