Core consumer prices, excluding the well-known surge in energy costs, rose 0.4% in April, double March’s 0.2% gain and above economists’ expectations of 0.3%.
Compared with the same period last year, core CPI rose 2.8%, compared with 2.6% in March and 2.7% expected.
Overall CPI (excluding energy costs) rose by 3.8% in April, compared with only 3.3% in March, against expectations of 3.7%. 3.8% is the fastest inflation rate since May 2023.
The data has market participants quickly pricing in a rate hike from the Fed – a dramatic change from just a few weeks ago, when the question was how often the Fed would cut rates in 2026.
According to CME FedWatch data, the market predicts that the probability of one or more interest rate hikes this year is more than 35%.
The news sent stocks lower, with the Nasdaq down 1.3%.
However, Bitcoin (BTC) has remained stable and is currently trading at $80,500, roughly flat over the past 24 hours. Major altcoins such as Ethereum (ETH) and Ripple (XRP) fell nearly 2.5%.
