Core consumer prices – which would have excluded what everyone already knew was rising energy costs – rose 0.4% in April, double March’s 0.2% pace and higher than the 0.3% economists expected.
On an annual basis, the core CPI increased by 2.8% compared to 2.6% in March and 2.7% expected.
The overall CPI – which includes energy costs – was 3.8% higher in April compared to just 3.3% in March and 3.7% expected. This 3.8% represents the fastest rate of inflation since May 2023.
The data has market participants quickly pricing in rate hikes from the Federal Reserve – a massive shift from a few weeks ago, when the question was how often the Fed would cut rates in 2026.
According to CME FedWatch, markets believe there is a greater than 35% chance of one or more rate hikes this year.
The news helped send stocks lower, led by the Nasdaq’s 1.3% decline.
Bitcoin (BTC), however, has remained stable, currently trading at $80,500, roughly flat over the past 24 hours. Major altcoins like Ether (ETH) and XRP (XRP) are down over 2.5%.
