🚨 BREAKING: US inflation came in hotter than expected for April 2026, rising to 3.8% annually — the highest level since May 2023 — versus the forecasted 3.7%.
The surge is largely driven by the Iran war-fueled energy shock, with gasoline prices up 28.4% year-over-year. Core CPI also surprised to the upside at 2.8%, while real wages turned negative for the first time in 3 years.
Markets are now pricing in a ~30% chance of a Fed rate hike by year-end, making any near-term rate cuts increasingly unlikely. The Fed faces a classic stagflation dilemma — slowing growth, rising prices, and a labor market under pressure.
The question now: Does the Fed hold, hike, or blink?