CPI Shake‑Up: April’s Numbers Brunch a Little
What the Stats Actually Say
The headline inflation ticked down to 3.4% year‑over‑year, a little slimmer than the 3.5% it had been nagging at before. Monthly, it dropped to a gentle 0.3%, comfortably below what most folks expected. The real kicker? Core CPI fell to 3.6%, the softest reading since May 2021.
If the Fed Gave a Nod
Cash flow in the markets has taken a step back. The USD overnight index swap (OIS) curve is now hinting at roughly 50 basis points of easing later this year, lining up with what the Federal Open Market Committee (FOMC) will likely mark as median chills in June’s dot plot.
It’s Not a Summer with One Swallow… Yet
Look, a single drip of relief isn’t the whole story. On its own, this data doesn’t give the Fed enough confidence to slash rates just yet. But the trend? We’re eyeballing a cut—probably toward the end of September—unless labor markets throw a curveball that’s too sharp. Even so, the markets are still humming a “bullish” tune, keeping risk appetite on the up‑trend.
Quick Takeaways
- Headline CPI: 3.4% YoY, 0.3% MoM—softening up.
- Core CPI: 3.6% YoY—best be‑since May 2021.
- Market feels a bit more relaxed: USD OIS suggests 50bp easing.
- Rate cut still a “maybe” – cannot just flip the switch.
- September looks good unless jobs go haywire.
All in all, the last April numbers bring a welcome pause in the inflation marathon, but the Fed’s cautious steps suggest we’ll still be feeling the burn for a bit longer.
