If food, which was unchanged, and energy are excluded, the core CPI rose 0.2%. It was up 2.6% from one year ago. Economists closely watch this so-called core measure in an effort to better capture inflation’s underlying trend.
Otherwise, outside of energy, the CPI was less discouraging.
Let’s review Figure 2, which breaks the CPI into two key categories: services and consumer goods.
As supply chains normalized in the wake of the pandemic, inflation in consumer goods slowed sharply and briefly slipped into deflationary territory. Services inflation proved to be more persistent, but it has since eased back toward pre-pandemic levels.
More recently, however, inflation in consumer goods has re‑accelerated.
But it’s not simply oil. Let’s look at three other key commodities that originate from the region.
- About one-third of the world’s helium comes from Qatar and flows through the Strait of Hormuz, according to the United States Geological Survey (USGS). It’s not simply party balloons that are affected. Helium is essential in the production of computer chips.
“Currently in our own domestic economy, helium is more valuable than foreign oil because it’s used to cool the processing of semiconductors and there is no substitute for it,” said Todd Schoenberger, CIO at CrossCheck Management.
A prolonged shortage could have a significant impact on semiconductor manufacturing.
Where does the world’s helium come from?
- 44% United States
- 34% Qatar
- 10% Russia
- 6% Algeria
- 6% Other
Source: USGS, Reuters, 2025
- The world’s supply of fertilizer is being impacted by the war. Countries exposed to disruptions account for nearly 50% of global exports of urea—a widely used nitrogen fertilizer—and about 30% of global ammonia exports, according to the US Farm Bureau.
Though the US does not directly import large quantities of fertilizer from the Middle East, fertilizer markets, like oil, respond to price movements in the region. Lower global crop yields would likely lift food prices if the Strait remains blocked for an extended period.
- Persian Gulf Coast countries produced about 6 million metric tons of aluminum in 2025, representing about 9% of global aluminum output, according to the International Aluminum Institute.
The damage from last week’s attack on Emirates Global Aluminum and Aluminum Bahrain’s facilities is still being assessed, according to the companies and S&P Global.
The US relies on imports for about 60% of aluminum, USGS data shows (Reuters). Gulf nations accounted for 22% of US aluminum imports last year. Because aluminum is used early and repeatedly in production chains, price increases can propagate quickly.
Key point: Aluminum is not a niche metal. It is a cost base for large parts of the economy, including autos, packaging, construction, machinery, electronics, and power transmission.
Clearly, the world is interconnected, and what happens in one region can ripple through global supply chains. But we are also mindful that we may not be having this conversation in a few months. Most observers, including the president, believe the war will end shortly.
