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US inflation surprised markets with a third consecutive pro-inflation result, raising questions about the resilience of the US economy to inflationary pressures. Predictions of a rapid decline in inflation to the Fed's 2 percent target now appear less likely.

Markets reacted quickly to the new data by casting doubt on the likelihood of a June rate cut and starting to more aggressively project rising inflation expectations into the dollar yield curve.

Although consumer inflation is expected to slow slightly in April due to the effect of a high benchmark, the key moment will be the data for May and June, which may increase headline inflation again. This could prompt the Fed to reconsider its plans to cut interest rates or slow the process of quantitative tightening.

The latest inflation data from the US makes it clear that the Fed's path to easing monetary policy will not be easy. With inflation high and interest rates in tight territory, the Fed may find itself in a situation where it will have to carefully weigh its next steps to avoid jeopardizing economic growth.

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