Inflation Held Steady Before Iran Operation Fueled Energy Prices

Inflation held steady at 2.4% in February, according to new data released Wednesday by the Bureau of Labor Statistics. 

While inflation remains above the Federal Reserve’s 2% target, it is significantly lower than levels seen during the height of the post-pandemic surge.

Energy prices rose 0.6% in February after falling 1.5% in January, driven by higher gasoline and natural gas prices, while electricity declined. Because the United States entered the conflict with Iran on the final day of February, the recent surge in oil prices is not reflected in the latest inflation data. Oil was trading around $70 per barrel before the conflict and is now in the mid-$80 range.

Core inflation, which excludes volatile food and energy prices, remains relatively stable, reinforcing the broader trend of moderating price growth.

Inflation under Joe Biden reached 9.1%, the highest in half a century.

Under President Trump, inflation is down and holding steady! pic.twitter.com/NzbKAxFmt6

— GOP (@GOP) March 11, 2026

Inflation peaked at 9.1% in 2022 during the Biden administration before gradually cooling the past two years.

Earlier this week, oil briefly spiked to around $120 per barrel — its highest level since 2022 — before retreating after President Donald Trump said “the war is very complete” and signaled he was considering U.S. control of the Strait of Hormuz, which carries roughly one-fifth of global oil supply. 

Food prices rose 0.4%, and shelter increased 0.2%. Gains were driven largely by higher prices for candy, fruit, and vegetables. Notably, egg prices, often cited as a grocery barometer, have fallen 42.1% over the past year. 

Stocks and bonds reacted modestly, with futures largely flat. Many financial analysts are now looking to the March Consumer Price Index report for a clearer picture of how geopolitical tensions might influence prices. 

New York Fed President John Williams said the Iran conflict could affect near-term inflation but that its lasting impact will depend on how long it persists. “Something that would obviously affect kind of a nearer-term inflation outlook. We’ll have to see how persistent this is and how long this is, but it would have an effect on overall inflation.”