Breaking: US annual CPI inflation falls to 8.3% in April versus 8.1% expected

• Headlines CPI came in at 8.3% YoY, above the expected 8.1%. 
• Measures of core inflation were also hotter than forecast. 
• The DXY jumped as a result and is now probing the 104.00 level once again. 

The annual pace of headline inflation in the US according to the Consumer Price Index (CPI) fell to 8.3% in April from 8.5% in March, according to the latest release from the Bureau of Labour Statistics on Wednesday. That was above the expected decline to 8.1% YoY. The MoM pace of headline inflation fell to 0.3% in April from 1.2% in March, also above the expected drop to 0.2%. 

Measures of core inflation according to the Core Consumer Price Index also came in above expectations. The YoY rate clocked 6.2%, below March's 6.5%, but above the expected drop to 6.0%, while the MoM saw a larger than expected jump to 0.6% from 0.3% in March versus the expected 0.4% reading.  

Market Reaction

The US Dollar Index (DXY) jumped to print fresh session highs near 104.00 as a result of the higher than expected inflation readings, especially given the MoM pick up in the pace of Core CPI inflation. These numbers will worry the Fed and underpin expectations for aggressive tightening this year and next.