The latest CPI print came in hotter than expected at 3.78% year-over-year, above the 3.6–3.7% consensus, with core inflation also surprising to the upside at 2.74% — up from 2.47% in February. The culprit is supply-side: an energy crisis tied to ongoing Middle East geopolitical conflict is driving transportation inflation back toward 7% and pushing apparel above 4%, while housing's CPI weight pushed the headline figure higher as shelter costs climbed from 3.37% to 3.63%.
The market reaction has been swift in rate expectations. Pricing for any 2026 or 2027 rate cut has essentially evaporated — and the market now assigns higher probability to a rate hike in 2027 than a cut. That is a dramatic reversal from the multiple cuts that were priced in just months ago.
For crypto, the read is straightforward and painful: altcoins continue to bleed against Bitcoin as liquidity expectations…
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