We're getting a taste of what the 'peak inflation' trade looks like

Core CPI was a shade below expectations and the dollar has been hit hard across the board. The market has been pricing in a Fed funds rise to 3.25% but if we start to see prices flatten out, we may never get there.
It strikes most people as insane to call a top in inflation at 8.5% but gasoline prices are on track to be materially lower in April than March. There are also signs of slowing demand for goods, which could continue to cool (or at least flatten) prices for durable goods.
Remember, prices don't need to revert to knock down inflation — they just need to stop rising.
The reaction in stocks is also telling. S&P 500 futures are up 1.2% in a jump from when the data was released. It's now clear there was a lot of fear about inflation in yesterday's stock trading, particularly that rout in the final 30 minutes of US stock trading.