US consumer inflation continued to accelerate (3.5%) in March, according to data published on Wednesday, reducing the chances of an early interest rate cut from the Federal Reserve in a tense election year. Financial markets were roiled by the numbers, which ignited the dollar and Treasury yields and sent the stock market tumbling.
Paired with recent reports showing the labour market and economic activity have also been stronger than expected, investors no longer see much chance that the Fed will feel a need to start easing anytime soon.