U.S. inflation rose in February 2026 due to a Middle East conflict spiking oil prices and gas costs.

Inflation held steady at 2.4% in February 2026, with core inflation at 2.5%, both above the Fed’s 2% target. A U.S.-Israeli strike on Iran on February 28 disrupted Persian Gulf shipping, spiking oil prices and pushing U.S. gas prices to $3.58 per gallon—a 20% monthly increase. Analysts warn this could trigger a 0.9% monthly inflation surge in March, potentially pushing annual inflation above 3%. Higher energy costs are expected to raise airfares, shipping fees, and food prices, complicating Federal Reserve decisions on interest rates.