The U.S. annual inflation rate surged to 3.5% in March, the highest since May 2023, driven by rising gasoline prices due to the Iran conflict and President Trump's import tariffs. The conflict has disrupted oil exports, increasing energy costs, while tariffs on imports have intensified inflationary pressures. This inflation spike complicates the Federal Reserve's policy environment, with the Consumer Price Index rising 3.3% year-over-year. Market expectations for a Fed rate cut in 2026 have diminished, with a 3.5% probability of a cut in June and an 87.5% likelihood of holding rates steady in July. Bitcoin's price, however, remains largely unaffected by these inflationary trends.