U.S. PCE inflation rises at fastest pace in three years in April

U.S. inflation accelerated at its fastest pace in three years in April, driven by higher energy prices amid the war with Iran. The data reinforces expectations that the Federal Reserve could keep interest rates unchanged well into next year, a hawkish backdrop for rate-sensitive assets. The combination of hotter inflation and geopolitical energy shocks has broad market implications.

Analysis

U.S. inflation accelerated at its fastest pace in three years in April, driven by higher energy prices amid the war with Iran. The data reinforces expectations that the Federal Reserve could keep interest rates unchanged well into next year, a hawkish backdrop for rate-sensitive assets. The combination of hotter inflation and geopolitical energy shocks has broad market implications.