Oil's retreat eases inflation fears, but April's pain may still come

Consumer sentiment fell 10.7% in April as inflation expectations surged to 4.8% from 3.8% in March. The jump reflects growing unease over prices, even as oil retreats from its war-driven highs. Brent crude for June delivery fell 0.8% to $95.20 per barrel Friday, and U.S. crude for May dropped 1.3% to $96.57. That’s down sharply from peaks above $119, a pullback fueled by planned U.S.-Iran talks in Pakistan this weekend. The diplomatic opening has eased fears of prolonged disruption to the Strait of Hormuz, a chokepoint for global oil shipments. March inflation came in hot but slightly below forecasts, with gas prices feeding the surge. Yet analysts warn the full impact of earlier oil spikes has not yet flowed through. "While I’m glad to see the effects to be less than expected in March, the effects in April are now more likely to be worse," Jamie Cox of Harris Financial Group noted. The Federal Reserve is watching closely. With inflation still above its 2% target and expectations unanchoring, the central bank is likely to hold rates steady. Some officials have signaled a hike remains possible if price pressures persist.