An inflation surprise greeted investors on Wednesday, sparking significant apprehension about the future of interest rates. The discussion regarding Fed rate cuts seems to be postponed for the time being following a surge in the inflation rate to 3.5% in March 2024, surpassing estimates of a 3.4% increase. What’s even more concerning is that core inflation, which excludes volatile food and energy prices, remained steady at 3.8%, defying expectations of a decline to 3.7%. Many economists cautioned Wednesday there is no chance the Fed will reduce interest rates in June, with the likelihood of higher-for-longer interest rates gaining pace. Money markets are pricing in a 44-basis-point reduction in rates by year-end, with September being considered the most probable option for the onset of the easing cycle. Yet there are increasing risks that September could represent the sole reduction in 2024. By midday trading in New York, all major indices were in the red, with small caps underperforming large caps. Sector-wise, real estate stocks were the hardest hit, given their heightened sensitivity to interest rates. Yields on two-year Treasurys spiked by 20 basis points ...