US inflation rose to 3.8 percent in April as consumer prices rose to a three-year high as fuel costs rose amid the Iran-US conflict, complicating the Federal Reserve’s stance on interest rates.Data released by the Labor Department on Tuesday showed the consumer price index (CPI) rose 0.6 percent in April after a 0.9 percent jump in March, the biggest monthly increase since June 2022. On an annual basis, inflation rose to 3.8 percent, the highest year-on-year increase since May 2023.According to official data, gasoline prices in the US are now 28 percent higher than a year ago. AAA estimates show average gasoline prices have surpassed $4.50 a gallon, about 44 percent above year-ago levels, squeezing household budgets and raising concerns about the broader economic fallout.Energy prices have surged after hostilities escalated between the US, Israel and Iran earlier this year. Markets were jittery after Tehran blocked access through the Strait of Hormuz – a vital global energy route that handles about a fifth of the world’s oil and liquefied natural gas supplies.Core inflation, which excludes food and energy prices, remained relatively contained. Core CPI rose 0.4 percent month-on-month and 2.8 percent year-on-year, showing that higher fuel costs have not yet fully spread to the broader economy.Food prices also increased in April. Grocery costs rose 0.7 percent from March due to rising meat prices after a slight decline the previous month.The latest inflation readings have added uncertainty for the Federal Reserve, which was previously expected to start cutting interest rates in 2026. Policymakers are now signaling caution amid fears that prolonged geopolitical tensions and higher oil prices could trigger another wave of inflation.US President Donald Trump has repeatedly criticized the Fed for not reducing borrowing costs faster enough to support economic growth. Attention now turns to Kevin Wersh, Trump’s nominee to replace outgoing Federal Reserve Chairman Jerome Powell, who is expected to be confirmed by the Senate this week.High fuel costs are beginning to affect corporate America as well. Appliance maker Whirlpool Corporation said last week that quarterly revenue declined nearly 10 percent, warning that the war-induced economic downturn has severely hit consumer confidence.