There was a time — not so long ago — when pulling into a gas station felt routine. You filled the tank, grabbed a bad cup of coffee, and got on with your day. These days, the pump is delivering something closer to an economic news briefing. Gasoline has crossed $4 per gallon nationally, driven largely by the ongoing conflict in the Middle East and pressure on the Strait of Hormuz, the narrow chokepoint through which a significant share of the world’s oil supply travels. When that waterway gets complicated, everything downstream gets more expensive. Literally.
What makes this moment more than just a painful fill-up is where inflation goes next. Gas prices are what economists call a “leading edge” — they show up fast, they’re visible, and they change behavior quickly: Yours and mine! The challenge for the Federal Reserve is that higher gas prices are inflationary, but they also reduce household spending power and dampen growth which means the typical cure (raise rates) can also worsen the patient’s other symptoms. Headline PCE, (Personal Consumption Expenditures), the Fed’s preferred inflation gauge, has already climbed to 3.5% year over year in March 2026, up from 2.8% in February, and the trend line hasn’t bent back down yet. Kevin Warsh, newly installed as Fed Chair, faces his first policy meeting on June 16th with a genuinely difficult hand. Inflation is rising. Growth is fragile. And the president wants rate cuts. Good luck with that.
So what does any of this mean if you’re running a municipality, a school district, a utility fleet, or a commercial operation that depends on equipment to get the job done? Actually, quite a bit. The cost of waiting whether on a lease structure, a capital purchase, or a financing decision you’ve been penciling in for “later this year” has a real number attached to it now. Fixed-rate structures lock in today’s economics; floating-rate assumptions that made sense in February look different at $4 gas and a 3.5% PCE. At Saulsbury Hill Financial we’ve been having a lot of these conversations lately, and the message is pretty consistent: if something is on your radar, it’s worth at least a phone call before the Fed meets and the calculus shifts again.
“Inflation is taxation without legislation.”
Milton Friedman