April’s inflation print tops estimates, driven by energy costs, lifting December Fed rate hike odds to nearly 30%.
US consumer prices climbed 3.8% year-on-year in April, surpassing the 3.7% consensus forecast and accelerating from March’s 3.3% gain. Energy prices contributed 40% of the monthly increase, with electricity costs rising 2.1% month-on-month and food prices up 0.5%.
Core CPI, excluding food and energy, rose 2.8%, above the 2.7% estimate and March’s 2.6% reading. Services inflation excluding energy increased 3.3%, while goods prices gained 1.1%. Markets now price a near-30% chance of a December rate hike, up from prior expectations.
Analysts warn that persistent energy cost pass-through and broadening price pressures may delay Fed rate cuts, with some firms reducing 2026 easing expectations. Fed officials have flagged concerns over cumulative inflation shocks and services price trends.