There's good news and bad news in yesterday's inflation report, Axios' Felix Salmon writes.

• The bad news: Consumer prices have risen by a shocking 8.5% over the past year, a rate of increase not seen in more than 40 years.
• The good news: That number has probably gotten as high as it's going to get, and could soon start coming down.

What they're saying: Inflation "has likely peaked," said Bank of America analysts yesterday. Their counterparts at Capital Economics concurred, saying that the 8.5% figure would "mark the peak" for the series.

How it works: The headline inflation figure, which spiked by 1.2% in March alone, has been driven overwhelmingly by energy prices. Core inflation, which excludes food and energy, was relatively subdued, rising only 0.3%.

• Good news is likely in the coming April inflation report: The price of oil has fallen to $94 a barrel, down from a peak of $124 on March 8.
• Gas prices have followed oil prices down. The U.S. average price of $4.08 is down 6% from $4.34 in early March, per GasBuddy.

Be smart: Base effects matter a lot when looking at year-over-year inflation numbers.

• Right now we're reaching the end of the period in which we're comparing to prices that were artificially depressed by the pandemic — and we'll soon be comparing to prices that were hitting artificial highs thanks to global supply constraints.

The other side: Any declaration that inflation has peaked is necessarily "provisional at best," wrote RSM's Joe Brusuelas in a research note, given the volatility and unpredictability of oil prices in a time of war.

• If Europe stops importing oil and natural gas from Russia for any reason, that alone could send energy prices soaring again.

What's next: The Fed is going to keep on raising rates all year. The central bank tries to ignore volatile food and energy prices, but core inflation, at 6.7%, is well above the Fed's 2% target.

• Higher interest rates have already started to show up in the mortgage market, where 5% mortgages are now common. That should help slow home-price inflation.

The bottom line: We may be moving from inflation being high and rising, to inflation being high and falling. That's better, but it's still not great.

🚚 Blockade at Mexican border imperils food shipments. (Bloomberg)

🌾 There are not enough trains to move all the grains. (AP)

Wall Street banks are supposed to be masters of the financial universe. But surging interest rates likely hurt several of their key businesses in recent months, Matt writes.

Driving the news: First-quarter earnings season gets underway this week, with JPMorgan Chase starting the festivities this morning. The recent trajectory of bank stock prices suggests investors aren't expecting good news as earnings results roll in over the next week.

How it works: Wall Street makes money — lots of it — by connecting companies to giant pools of capital. They ...

• Make loans.
• Help companies list their stock on exchanges.
• Advise CEOs on M&A.
• Arrange complicated offerings of corporate bonds.
• Package massive pools of consumer borrowings — like mortgages and car loans — into securities.

Between the lines: Rising rates allow banks to charge more on loans. But some of their other businesses get a lot more complicated when rates move up suddenly — as they have over the last couple of months.

• That's because the sharp rise in rates — not to mention the war in Ukraine — has made markets incredibly jittery. (The S&P 500 was down by as much as 12.5% in early March, though it clawed back a lot of ground since.)
• Those jitters becalmed key banking activities. M&A dealmaking dropped. The IPO market was put on ice. Business lending flatlined.

Meanwhile, banks will also likely have to take "mark-to-market" losses on some of the bonds they own (the value of bonds falls as interest rates rise).

What they're saying: Analysts at J.P. Morgan estimate that the commercial banking sector may have suffered roughly $60 billion in mark-to-market losses in the first quarter.

• Fitch Ratings estimates it could be even higher, with as much as $80 billion in losses.

What we're watching: Which banks have heroes on their trading desks — which tend to make money amid choppy market conditions — and are able to offset the drags from higher rates.

We're slowly trickling back to the office. Occupancy rates in the 10 major cities tracked by security firm Kastle are at 43%, their highest level since this whole mess began, Emily writes.

Why it matters: There's a lot hanging on the return to the office, economically and culturally. The fate of downtown districts around the country, municipal bond ratings, the health of small businesses, and, yes, the popularity of soft pants.

By the numbers: Kastle measures occupancy by looking at how many people are swiping into their offices. The chart above tracks 10 cities, including Washington, D.C. (39% occupancy), Chicago (38%), New York (38%), Los Angeles (41%) and Philadelphia (39%).

• San Jose was at the bottom of the list with 33% office occupancy.
• Austin led the list with 63% occupancy, the other Texas cities on the list also had high rates: Dallas (51%), Houston (56%).

Why Austin? "With COVID numbers way down from pandemic highs, on the ground in the boomtown that is Austin, grocery stores are humming, and restaurants are bustling — and that extends to office space," says Asher Price, who co-writes the Axios Austin newsletter.

Emily's thought bubble: Next week, we're heading into the Axios office in Manhattan, and I'm already a little stressed about it after working at home for two years ... We're keen to hear about your experiences going back to the office, for a piece next week. Email us with thoughts or stories.

If you've been to the supermarket recently, the chart above may not surprise you. I have, and the data still shocks me, Emily writes.

Food prices in March, overall, were up 8.8% from the previous year. Some crucial items, like meat and dairy, surged even higher, according to the Consumer Price Index released yesterday.

Why it matters: As we said yesterday, rising food prices worldwide hurt the most vulnerable. The U.S. is no different.

• To cope with rising prices, some women are eating less food in order to make sure their families are fed, as The 19th reported yesterday.