Rising pricing pressure, which the Fed has been expecting, is starting to show up in the data. In April, the Consumer Price Index (CPI) increased 0.8% on a month-over-month basis. On a year-over-year basis, the CPI was up 4.2% in April versus up 2.6% in March. Core CPI (which excludes food and energy prices) was up 3.0% year-over-year in April versus up 1.6% in March. Within the core index, prices on nearly all major components increased in April. While year-over-year inflation rates were expected to increase as we cycle the deflationary impact of the pandemic last year, the big month-over-month jump in the April CPI was even higher than the high end of the consensus range. Meanwhile, producer pricing pressure is also heating up, with the Producer Price Index (PPI-FD) up 0.6% month-over-month in April, versus the consensus estimate of 0.3%. Import prices were also higher than expected, up 10.6% year-over-year in April versus the consensus estimate of 10.2% and a 7.0% year-over-year increase in March.