April US Inflation Falls to Four-Year Low, Markets React

April's inflation data showed a mixed economic picture, with the Consumer Price Index rising 2.3% year-over-year, slightly below expectations and marking the lowest annual increase since 2021. The Producer Price Index fell unexpectedly, signaling weakness in wholesale prices and consumer demand, which led to a sharp selloff in cryptocurrencies including Bitcoin and Ethereum. While lower inflation figures have raised hopes for Federal Reserve rate cuts in 2025, weak retail sales and potential tariff impacts inject uncertainty into monetary policy decisions. The Federal Reserve is likely to maintain a cautious stance, as tariff-induced cost pressures could delay further interest rate reductions despite the favorable inflation trend. Key inflation contributors included rising shelter and energy costs, while food prices saw a slight decline. Overall, the data suggest a cautious optimism tempered by concerns over slower economic activity and the effects of recent trade policies.