Higher diesel prices and shipping disruptions in the Middle East threaten to push US consumer prices up further, complicating Fed policy.
US diesel prices have climbed sharply, raising transportation costs for groceries and construction materials. The increase comes as Middle East shipping reroutes add to supply chain pressures, stoking inflation concerns.
Diesel, a key input for freight and logistics, has seen steady gains amid tighter global supply. Analysts note the timing is problematic, as the Federal Reserve remains cautious about cutting rates with inflation still above target.
Markets are monitoring the impact on core inflation metrics, with traders adjusting expectations for Fed easing later this year.