U.S. April CPI shock: 3.8% headline, 2.8% core; 10-year at 4.45%, hike odds 30%

BLS reported April CPI on May 12 at headline +0.6% MoM and +3.8% YoY, the highest since May 2023, with core at +0.4% MoM and +2.8% YoY, beating the +3.7% consensus. Energy rose 3.8%, accounting for more than 40% of the headline increase, while gasoline was up 28.4% YoY. Immediately after the release, the 2-year yield rose 3bp to 3.98%, the 10-year rose 4bp to 4.45%, and DXY gained 0.3% to 98.29. CME FedWatch priced year-end hike odds at roughly 30%. The University of Michigan's May consumer sentiment index fell to its lowest level since the survey began in 1978.