April’s hotter-than-expected inflation reading is likely to put the Fed on watch for higher energy costs creeping into other prices, a red line that, if crossed, could raise the possibility of interest rate hikes. The Consumer Price Index rose 3.8% in April, compared with expectations for a rise of 3.7%, and up from 3.3% in March. Energy prices accounted for 40% of the increase, while shelter and food also surged. “The fact that higher input costs from oil are being readily passed through to consumers, as well as other signs of broadening inflation impact, should both add to the Fed’s worries about inflation,” said ... (full story)