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April CPI Jumps 3.8% as Energy Spikes, Fed Holds Rates

5/12/2026

31 3 Full Breakdown

Summary

US CPI Surge

U.S. consumer prices rose 0.6% in April, lifting year-on-year CPI to 3.8%, the biggest rise in three years.
Energy prices rose 3.8% after U.S. and Israeli strikes on Iran, contributing over 40% of the CPI gain.
The Federal Reserve (Fed) kept its rate at 3.50%-3.75% and expects it unchanged through 2027, raising political risk for U.S. President Donald Trump ahead of the November 2026 midterms.

Summary

Consumers Sentiment Plummets

Consumer sentiment fell to a record low of 48.2 in May (University of Michigan).
CFOs now expect 12-month inflation at 3.7%, up from 3.1% in January.
Pew poll shows 66% of Americans call inflation a “very big problem,” up from 63%.
Whirlpool Corp. reported a nearly 10% revenue drop this quarter, citing war-driven decline.
CME FedWatch indicates more than 90% probability that rates will stay steady at the mid-June meeting.

History

Historical Context

In 1980 inflation hit 13.5% and the Federal Reserve, led by Paul Volcker, lifted the federal-funds rate from about 11% in 1979 to 20% by June 1981. The tightening, backed by Treasury Secretary William Miller and President Jimmy Carter, deepened the 1980-82 recession, pushing unemployment to nearly 11%. Today’s 3.8% year-on-year CPI rise and steady-rate outlook echo that 1980s trade-off between price stability and job loss.

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US CPI Surge

U.S. consumer prices rose 0.6% in April, lifting year-on-year CPI to 3.8%, the biggest rise in three years.
Energy prices rose 3.8% after U.S. and Israeli strikes on Iran, contributing over 40% of the CPI gain.
The Federal Reserve (Fed) kept its rate at 3.50%-3.75% and expects it unchanged through 2027, raising political risk for U.S. President Donald Trump ahead of the November 2026 midterms.

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