Core consumer prices – which would have excluded what everyone already knew were rising energy costs – rose 0.4% in April, double the pace of 0.2% in March and more than the 0.3% expected by economists.
Year-over-year, core CPI rose 2.8% versus 2.6% in March and 2.7% expected.
The headline CPI, which includes energy costs, was higher by 3.8% in April, compared to just 3.3% in March and the expected 3.7%. That 3.8% was the fastest pace of inflation since May 2023.
The data has market participants quickly pricing in the Fed’s rate hikes, a massive change from weeks ago, when the question was how often the Fed would cut rates in 2026.
According to CME FedWatch, markets see a greater than 35% chance of one or more rate hikes this year.
The news has contributed to stocks falling, led by the Nasdaq’s 1.3% drop.
Bitcoin (BTC), however, has remained stable and is currently trading at $80,500, roughly unchanged in the last 24 hours. Major altcoins like ether (ETH) and XRP (XRP) are down closer to 2.5%.
