U.S. March CPI Shock at 3.3%, Killing Rate-Cut Hopes

The March CPI released April 10 hit 3.3% year-over-year—the highest reading in roughly two years—driven almost entirely by energy. The U.S.-Iran conflict's crude shock is now flowing through headline inflation. Market consensus on Fed rate cuts evaporated overnight; instead of pricing 1–2 cuts this year, traders now bet on no cuts through year-end. Bonds sold off sharply; equities rallied on Strait of Hormuz ceasefire relief, with the S&P 500 gaining 3.6% on the week.