Headline consumer inflation reached a fresh four-decade high in March, prompting an odd rally in both stocks and bonds. The explanation was simply that it wasn’t any worse than expected. The bar is pretty low at this point.

The overall consumer inflation index (CPI) was up +1.2% in March, exactly matching the median forecast, while core CPI rose +0.3%, below the expected +0.5%. On a year-over-year basis, overall CPI was increasing at a 43-year high of +8.5% last month, while core CPI is now rising at a +6.5% pace, the highest in 40 years. The whisper numbers were higher.

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