#USCPIHits3.8%: The Iran War Just Showed Up on Every American's Receipt. April CPI dropped this morning: 3.8% year-on-year — the highest since May 2023, beating the 3.7% consensus. The month-on-month read came in at 0.6%. Both numbers landed above expectations. The driver is obvious. Energy costs jumped 17.9% annually, with gasoline up 28.4%. The national average gas price hit $4.50 a gallon — up from $3.14 a year ago. Energy accounted for over 40% of the monthly headline gain. The Iran blockade, which has been choking oil supply since late February, is now showing up clearly in the data. But the part that worries economists more is what's underneath. Core CPI — which strips out food and energy — accelerated to 0.4% monthly and 2.8% annually, both above forecasts. Shelter costs jumped 0.6%. Airline fares are up 20.7% year-on-year. Apparel up 0.6%. The Iran effect is bleeding into everything. For workers, it got worse. Real average hourly wages fell 0.5% for the month and 0.3% annually. For the first time in three years, wages are no longer keeping up with prices. The Fed implications are stark. Futures traders have now fully priced out any rate cut in 2026 — odds of a hike by year-end jumped to 30%. Warsh takes the chair on Friday inheriting the worst inflation print since his nomination was announced. His stated preference for lower rates now runs directly into data that argues the opposite. The blockade ends. Then it takes two to nine months for prices to normalize. That's the timeline Americans are living inside right now. #USCPIHits3.8%