War Will Be Funded by Inflation

With the prospect of peace on the horizon, free-market economists can rest easier knowing the worst of the Iran war may be over. Even if the war is really over, the state will still use it as a scapegoat for the Federal Reserve’s latest inflationary policies. The following article was originally published by the Mises Institute. The opinions expressed do not necessarily reflect those of Peter Schiff or SchiffGold.

On Friday, the Bureau of Labor Statistics released its consumer price index (CPI) report for March, and price growth surged to highest levels reported in nearly two years. Measured year over year, the CPI was up in March by 3.3 percent, the highest since May of 2025. Measured month to month, the CPI rose by 0.85 percent from February to March, the highest growth rate since June of 2022, 53 months ago. This has all combined to keep overall price inflation above the Fed’s two-percent “inflation target.” The surge in prices inflation included a year-over-year surge of 18.9 percent in gasoline prices, and a 19.4 percent increase in energy commodities overall.  On the other hand, used cars and trucks fell by -3.2 percent during this period. Shelter, medical care, and food all remained well above two percent, coming in at 3.0 percent, 3.7 percent, and 2.7 percent, respectively. 

Core CPI, which excludes food and energy, came in at 2.6 percent, measured year over year for March. That’s a three-month high. The month-to-month measure, on the other hand was at a nine-month low. In other words, even with gasoline prices removed from the equation, price inflation inched up in March. 

Overall, the trend in consumer prices has stubbornly remained elevated in spite of nearly two years of promises from Federal Reserve officials that price inflation would soon return to the Fed’s two-percent target.  Instead, the core CPI has only dipped below 2.5 percent in a single month (February 2026) since 2021. Meanwhile, the most recent print of the Fed’s preferred measure of inflation, PCE, was 2.8 percent (for February). The trend in PCE is overall upward since April of last year. …