Energy-shock inflation jump: April PCE ~3.8% (3-year high) as Hormuz closure keeps oil elevated and stalls Fed cuts

An energy-price shock stemming from the 2026 US-Iran/Israel conflict and the closure of the Strait of Hormuz pushed US inflation to multi-year highs during the window, removing the Federal Reserve's room to cut and underpinning the bond rout and equity volatility. The April PCE price index was reported around 3.8% year over year, a roughly three-year high, while reporting referenced headline figures near 3.8% and elevated core readings.

Oil stayed high and volatile: outlets cited Brent around $105-109 per barrel in mid-May, with the IEA noting North Sea Dated had swung from a high near $144 to below $100 before rebounding; Wikipedia's account dates the conflict's opening strikes (Operation Epic Fury) to Feb 28, the Strait's effective closure to early March, and a March oil peak (Brent ~$126, Dubai a record ~$166), with war-risk insurance premiums spiking multiples and tanker traffic collapsing. On May 15, markets sold off after President Trump rejected an Iran de-escalation framework: equities, bonds, gold and silver fell together, with spot gold near $4,558-4,583/oz and silver down 5-7%.

CAVEAT: outlets disagree on the conflict timeline (some market/EM commentary cited an April 19 strike date) and on intraday index levels; the inflation and oil figures are drawn from market reporting rather than a single official release in this window. The episode is the connective tissue linking the window's rates, FX, sovereign-debt and equity stories.