According to APP, analysts at First Citizen Bank stated in a report that Friday's US CPI data is expected to reflect the transmission of the Iranian energy shock for the first time, with overall inflation accelerating as energy costs surge. The bank's head of markets and economic research stated, "Because core inflation is more moderately affected, although still significantly above target, the Fed will currently 'ignore' the energy-driven inflation surge." He added that this will reinforce the Fed's long-term hold-at-home stance and closely link potential rate cuts to the normalization of energy prices.

This assessment is based on the ongoing tensions in the current geopolitical and energy environment. As of April 9, 2026, the latest market data shows that the Brent crude oil futures contract remained around $96.8 per barrel. Although this is a slight pullback from the high of over $110 at the end of March, energy costs remain significantly high, directly pushing up the energy component of the US PPI and CPI. Analysts at the bank believe that in the March CPI data to be released on Friday, rising energy prices will, for the first time, have a substantial weighting in the overall inflation reading. They expect the headline CPI year-on-year growth rate to accelerate by 0.2-0.4 percentage points compared to the previous value, while the core CPI (excluding food and energy) will be relatively less affected and will remain above the Federal Reserve's 2% target.

From a deeper perspective, the Iranian energy shock rapidly transmits to the consumer end through the crude oil, natural gas, and transportation chains, forming a typical supply-side cost-push inflation. The Federal Reserve's choice to "ignore" the energy-driven component in this scenario is primarily because energy price fluctuations are often temporary; once geopolitical risks ease or logistics recover, inflationary pressures are expected to naturally subside. This strategy is highly consistent with the handling logic of a similar high oil price cycle in 2022-2023. However, the Fed is currently in a high-interest-rate plateau phase, and holding rates steady will further solidify its resolve to combat inflation while avoiding a premature shift to easing due to short-term energy fluctuations.

Inflation Components and Federal Reserve Policy Scenario Comparison

This stance will also directly impact global capital flows. As major manufacturing and energy consumers, Asian giants may face increased cost pressures on their export companies if they encounter slowing US demand and a high-interest-rate environment. However, a sustained period of low oil prices could provide a buffer for their industrial production. Investors should closely monitor Friday's specific CPI breakdown data, subsequent statements from Federal Reserve officials, and the latest developments in the Middle East, as these variables will collectively determine the timing and magnitude of interest rate cuts.

Editor's Summary <br />First Citizen Bank's analysis clearly outlines the complex balance between current US inflation and monetary policy: while the energy shock has pushed up overall inflation, the Federal Reserve's strategy of focusing on core indicators is expected to maintain policy stability, and the pace of interest rate cuts will depend more on the actual normalization of energy prices. The market should use this as a reference to dynamically assess potential changes in the global interest rate path and asset pricing.