The Fed's preferred inflation measure hit 3.5% year-over-year in March—the highest in nearly three years—driven by gas prices spiking due to the Iran war. Real wages are not keeping up: incomes grew 0.6% while prices jumped 3.5%, meaning Americans' purchasing power declined for the second straight month. The Fed is likely holding rates steady for months while monitoring the war's economic fallout, which means borrowing costs stay elevated even as inflation erodes savings. Gas prices have jumped 37-84 cents per gallon across Illinois and Indiana in just the past week, making this an active, ongoing squeeze on household budgets.