Bank of America: Soaring natural gas prices will push U.S. inflation rate to nearly 4% in the coming months

LootboxPhobia · 2026-04-01T23:10:48+00:00

Bank of America warns that soaring energy prices will push the overall U.S. inflation rate to nearly 4% in the coming months, but expects this trend to be temporary. In the short term, a decline in oil prices will lead to a decrease in overall inflation, but due to supply chain issues and fertilizer supply disruptions, the price level by the end of next year could be 50 basis points higher than previously forecast. This presents a new challenge for the Federal Reserve.

LootboxPhobia

2026-04-01 23:10:48

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Investing.com - Bank of America warns that the surge in energy prices will push the United States’ overall inflation rate to approach 4% over the next few months. Price pressures are expected to persist into next year.

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After updating its oil price forecast, Bank of America economist Stephen Juneau revised the bank’s macroeconomic outlook. It now expects headline PCE inflation to reach a peak of nearly 4% in this quarter.

“We expect surging energy prices to lift year-over-year headline inflation to nearly 4% in the coming months,” Juneau wrote.

Bank of America expects this surge to be temporary. As oil prices pull back, overall inflation will fall quickly next year.

However, the bank warned that the price level expected by the end of next year is now 50 basis points higher than previously forecast. This is due to rising food inflation in 2027 from ongoing fertilizer supply disruptions, as well as persistent global supply-chain problems.

“Stubborn and widespread supply disruptions could also keep next year’s inflation rate above the target level,” Juneau wrote.

The revised outlook adds a challenging backdrop for the Federal Reserve.

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