MW The real inflation rate? Try 3.3% - and that's before the jump in gas prices.
By Brett Arends
The latest CPI data don't even factor in the Iran conflict. Here are some takeaways.
Americans face rising prices at the gas pump.
The federal government's publication of the latest consumer inflation data saw Wall Street once again engaging in its favorite activity - spraying BS as far and wide as possible, and on an industrial scale.
Moments after the latest official data dropped, my inbox began filling up with comments from strategists so vapid that I could almost hear my brain cells crying out in agony and dying while I read them. These comments will soon be replaced by artificial-intelligence robots with no - I repeat, no - loss of utility.
Forget the "official" or trailing 12-month inflation rate. Yes, those are the numbers Wall Street likes to talk about. They aren't just stale; to use Louisiana Sen. John Kennedy's excellent new phrase, they're as "dead as fried chicken." They compare prices last month with prices 13 months ago. Who cares? In the real world, where normies live, all that people care about are two things: What's happening to prices now, and what's likely to happen next.
And on these questions, the latest data are either ominous (if you are an optimist) or bad (if you aren't.)
Here are the key takeaways.
At the latest count, inflation is actually speeding up - it's getting worse, not better. Last month, consumer prices rose at an annualized rate of 3.3%, the latest official data show. A month earlier, that rate was just 2.1%. Over the past three months, prices have risen at an annual rate of 3.0% - the highest three-monthly reading since October.
That figure is after applying statistical "seasonal adjustments" that have the effect of lowering the apparent inflation rate. If you look at the raw consumer-price index before applying these adjustments, prices between January and February rose at an annualized rate of 5.8%. Yes, really. Good times.
And all of these figures are way above the Federal Reserve's official inflation target of 2% a year. So if this trend continues, anyone hoping for the Fed to cut rates again anytime soon is likely to be disappointed. If anything, a genuinely independent Fed would be thinking about raising short-term rates more than cutting them.
Worst of all, this acceleration of inflation took place before the Iran conflict added more than 50 cents to the price of a gallon of gas. The nationwide average is now $3.578 a gallon, according to AAA. A month ago, it was $2.937. Refining giants with major exposure to gasoline prices, such as Valero $(VLO)$ and Marathon Petroleum $(MPC)$, have seen their shares skyrocket by 10% or more since the conflict began.
Unless the crisis in the Persian Gulf is resolved soon, this will feed through to higher inflation in the coming weeks and months.
To give you an idea of the direction of travel, since the conflict began, Wall Street has slashed its expectations of any more Fed interest-rate cuts this year. In the betting at the CME futures exchange, the probability that there will be no more cuts has tripled in a few weeks.
Rising inflation is a menace to retirees. It is especially a menace to anyone invested in securities such as longer-term Treasury bonds, which are "safe" in name only. A bond paying you 4% a year for 10 years is a very different proposition if your prices rise 1% per year over that time, 2% a year, 3% a year ... or more.
As if on cue, Wall Street pushed up 10-year Treasury yields BX:TMUBMUSD10Y to 4.2%. They were under 4% before the bombing of Tehran two weeks ago.
And the bond market is now predicting inflation will average about 2.6% over the next five years. Just before the conflict broke out, that figure was 2.4%.
Just to make this point explicit: While Wall Street strategists were telling the public that the latest inflation figures were just fine - nothing to see here, folks, move along - they were cashing out of their Treasury bonds because of rising inflation risks.
All of which leaves me sounding, alas, like a broken record. Inflation-protected Treasury bonds, known as TIPS, give you much more long-term protection than regular Treasury bonds (though they are volatile in the short term, like regular bonds). Your columnist owns them in his retirement account. The very longest term, which can be purchased through low-cost exchange-traded funds LTPZ, will pay you inflation plus up to 2.5% a year for up to 30 years. As the song says, that ain't hay.
Meanwhile, the latest inflation figures should at least help those with cash to spare find better short-term savings rates as well. Some banks are offering five-year CDs paying 4% or above - and based on the action in the bond markets, such opportunities are about to get better, not worse.
-Brett Arends
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March 11, 2026 14:01 ET (18:01 GMT)
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