US inflation jumped to 3.8% in April, its highest level since 2023, largely driven by surging fuel prices sparked by the Iran war. Core inflation, which removes volatile energy and food prices, also rose to 2.8%.

“US inflation is close to peaking, but that does not mean relief is imminent,” an economist told the Financial Times, adding that unpredictable oil prices could lead to a more persistent energy shock.

A survey of chief executives published Monday showed that, on average, they expect to see inflation running at 3.7% over the next year.

The data comes at a critical moment for the US Federal Reserve, as incoming chair Kevin Warsh will be caught between fighting higher prices and US President Donald Trump’s calls to cut interest rates.