US inflation hits 3.8% in April, dashing hopes for near-term Fed rate cuts.

US inflation rose 0.6% in April, reaching 3.8% year-over-year, the highest since May 2023, driven mainly by rising energy and food costs. This increase weakens expectations for Federal Reserve interest rate cuts in 2026, with markets now pricing in a higher chance of rate hikes instead. The inflation surge also pressured crypto markets, with Bitcoin and Ethereum prices falling after the report. The Federal Reserve's next move remains uncertain, with the June meeting closely watched for signals on policy direction amid persistent inflation above the 2% target.