The 0.4% m/m gains in headline and core consumer prices in April leaves core inflation at 5.5%, broadly unchanged from its level at the start of this year, further illustrating that the previous downward trend has temporarily stalled. We don’t think that will persuade the Fed to hike again at the June FOMC meeting, but it does suggest a risk that rates will need to remain high for a little longer than we have assumed.
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