A key inflation measure jumped in March as gas prices soared, the latest sign that the Iran war is pushing up the cost of living and delaying any interest rate cuts by the Federal Reserve.

An inflation gauge monitored by the Fed, personal consumption expenditures, rose 0.7% in March from February, up sharply from the previous month, the Commerce Department said Thursday. Compared with a year ago, prices rose 3.5%, the biggest increase in almost three years.

Excluding the volatile food and energy categories, core inflation rose 0.3% in March from February, and it was 3.2% higher than a year earlier. The annual figure is above February’s reading of 3%.

Rising gas prices have caused inflation to move further away from the Fed’s 2% target, which has caused the central bank to keep its key short-term interest rate unchanged after cutting it three times last year. The Fed typically keeps rates elevated — or even raises them — to combat higher inflation.

Gas prices jumped nearly 21% in March from the previous month, the PCE report said.

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Still, the Fed typically pays more attention to core prices, and how much higher energy costs feed through to core inflation will be a major factor in how the central bank decides on its next moves.

“We’re very well aware that people are experiencing higher gas prices all over the country now,” Fed Chair Jerome Powell said at a news conference Wednesday. “And that hurts.”

Thursday's report also showed that consumer spending soared 0.9% last month, with most of the increase reflecting the sharp jump in prices. But it also indicates Americans lifted their spending a bit even after adjusting for inflation, a sign of consumer resilience.