CIBC Research discusses its reaction to today's US April CPI report.

"Price pressures were red-hot in the US in April, with the headline CPI rising by a 0.6% m/m pace as expected by the consensus. That reflected another lofty increase in gasoline prices and a pickup in food, which left the annual pace at 3.8%, up from 3.3% in the prior month. The first signs of passthrough from the oil shock into core elements were on display, with the ex. food/energy measure rising by 0.4% m/m (vs. 0.3% expected), with airfares up strongly, while some tariff-exposed categories including apparel added to the upside, leaving the annual pace at 2.8%," CIBC notes.

"This data only includes the first signs of broader spillover from the oil price shock into core components, and annual inflation is set to move higher in May, which will leave the Fed on the sidelines until there are signs of oil prices heading sustainably lower," CIBC adds.