April CPI Tops Estimates, Fed Rate Cut Bets Collapse to Near Zero
Talik Evans
- 2 min read
Image Credit: Shutterstock
Key Takeaways
- April headline CPI rose 3.8% year-over-year, beating the 3.7% Wall Street consensus, with core CPI also surprising to the upside at 2.8%.
- Markets now price in a 97.6% probability the Fed holds rates in June, with persistent shelter costs flagged as a key driver of continued inflation pressure.
- Bitcoin traded above $80,500 following the release, with analysts projecting a near-term range of $80,000–$85,000 amid elevated volatility and ETF demand as a potential stabilizer.
U.S. consumer prices rose faster than expected in April, with headline CPI climbing 3.8% year-over-year against a Wall Street consensus of 3.7%, according to the Bureau of Labor Statistics. Core inflation also exceeded forecasts. CME FedWatch data following the release showed markets pricing in a 97.6% probability that the Fed holds rates in June.
April CPI Beats on Both Headline and Core Readings
Core CPI, which strips out food and energy prices, came in at 2.8% year-over-year, one-tenth of a percentage point above the 2.7% consensus. Some analysts had flagged upside inflation risks ahead of the release, citing rising gasoline prices, geopolitical tensions, and persistent shelter costs. Samuel Tombs, chief U.S. economist at Pantheon Macroeconomics, said via Investing.com:
“What is most surprising isn’t so much the energy/food categories, but instead shelter, which was supposed to be one of the main sources of disinflationary pressure in the economy.”
He added that if shelter is accelerating while Iran fallout flows through other price categories, it’s likely the upward inflation pressure will continue for a while longer.
Bitcoin Moves Higher After CPI Release as Treasury Yields Climb
Bitcoin was trading at approximately $80,507.95 at the time of the release and moved higher in the minutes that followed, as Treasury yields also climbed. In comments to BeInCrypto, Arthur Azizov, Founder of B2BROKER Group and B2BINPAY, said the report fell short of a full crisis for risk assets. Azizov said:
“This month’s CPI release looks like a problem for risk assets, but not yet a disaster. The likely reaction will be higher yields, a stronger dollar, increasing pressure on the tech sector, and more volatility in crypto. Bitcoin can hold up better than smaller peers if ETF demand stays strong, but a clean breakout seems unlikely to me, as real yields and the dollar are both working against it.”
Azizov projected Bitcoin would trade between $80,000 and $85,000 in the near term, with elevated short-term volatility. “There is enough inflation pressure to keep risk appetite in check, but not enough to price in a full new rate-hiking cycle,” he added.
Next Data Points: April PPI and Scheduled Fed Commentary
With April CPI data now published, the next scheduled data release is the April Producer Price Index, due from the Bureau of Labor Statistics on May 13. The Fed’s next rate decision is set for June 17. Persistent core inflation above the Fed’s 2% target keeps the timeline for rate cuts uncertain.
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Talik Evans
Journalist and Financial Analyst
Talik Evans is a financial writer and crypto researcher with a growing focus on digital assets, Bitcoin markets, and blockchain innovation. Since 2021, she has been exploring the world of cryptocurrency, writing about everything from exchange comparisons to regulatory updates and security practices.