Inflation came in hot on the surface, but cooler underneath, giving markets just enough relief to keep the rally alive. March CPI rose 0.9% from the prior month, while the annual headline rate hit 3.3%, driven largely by energy, yet core inflation undershot expectations on both a monthly and yearly basis. This suggests the oil shock is biting, but not yet spreading broadly enough through the economy to force a more aggressive response from the Federal Reserve.
