CIBC Research discusses its reaction to today's US CPI print for the month of April.

"Price pressures were hotter than expected in the US in April, reinforcing the need for the Fed's front-loaded tightening cycle. The total CPI index rose by 0.3% on the month (vs. +0.2% expected), while core monthly price pressures accelerated to 0.6% (vs. +0.4% expected). That left the annual rates a couple of ticks higher than expected at 8.3% and 6.2% for total and core inflation, respectively, although those were still decelerations from the prior month, helped by base effects. Driving the price increases were gains in the shelter, food, airline fares, and new vehicles categories, amongst others," CIBC notes. 

"Looking beyond April, base effects will help annual inflation continue to decelerate in the near term, but that will be limited by gas prices, which are heading higher again, and supply disruptions resulting from lockdowns in China, in combination with the tightening in the labor market and higher shelter prices," CIBC adds.