CIBC Research discusses its reaction to today's US CPI print for the month of April.
"A mismatch of supply and demand, as the economy reopens quickly, is resulting in strong inflationary pressures in some key areas. Headline CPI rose 0.8% m/m in April, aided by a 0.9% increase in ex food & energy prices. Both of those prints were well above the consensus forecasts, and the core reading was the largest monthly advance since April 1982...he annual rates rose to 4.2% for headline and 3.0% for core, although those are fairly meaningless at the moment as we are starting to lap some very weak monthly prints a year ago," CIBC notes.
"While the dramatic upside surprise was driven primarily by a couple of standout areas, which are obviously unlikely to repeat such readings going forward, there was enough firming in inflation elsewhere as well to suggest that price pressures could prove more persistent than FOMC projections and the consensus forecast seem to suggest," CIBC adds.