It’s not dead yet.

Inflation dropped sharply in 2023 but it has reasserted itself in 2024, with unsettling implications for shoppers, financial markets, and President Joe Biden’s reelection odds.

The annualized inflation rate hit 3.5% in March, up from 3.2% the month before and 3.1% in January. The Federal Reserve’s inflation target is 2%, and for much of the last 12 months, it looked as if the Fed was making steady progress toward that goal. Now, maybe not.

Starting in 2022, the Fed raised interest rates 11 times — its usual tactic for battling inflation — by a total of 5.25 percentage points. The last rate hike was in July. With inflation broadly declining since then, investors have been hoping the Fed is finished hiking rates. At the beginning of 2024, most analysts expected meaningful rate cuts this year.

That looks increasingly unlikely. In January, the odds of rate cuts in 2024 were 100%, according to the CME Group’s FedWatch tool. Those odds have now fallen to 89%, with 95% odds that rate cuts total one percentage point or less. That’s a big disappointment to investors, who were hoping for deeper rate cuts sooner, and it explains why a five-month stock market rally stalled at the end of March as investors began accounting for stubborn inflation.

Read more: What the Fed rate decision means for bank accounts, CDs, loans, and credit cards

But not all is gloom. There’s actually some good news for shoppers in the latest inflation numbers, along with a reasonable chance that the resurgence of inflation won’t last. The buried gem in the otherwise troubling March inflation numbers is that goods inflation has essentially disappeared. The inflation rate for commodities in March was just 0.6% year over year, and the goods inflation rate has been under 1% for six months in a row.

Earnings are rising by 4.1% on an annualized basis, which means that in terms of goods, consumers are regaining purchasing power lost after COVID-era supply-chain disruptions and surging demand from stuck-at-home consumers sent goods prices soaring. Goods inflation peaked at 14.2% in March of 2022, so the catchup is welcome.

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The most nettlesome goods inflation has been food, which is obviously a staple. Even that inflation is abating, with prices up just 1.2% year over year in March. Past price hikes are likely here to stay because labor costs for producing, processing, and transporting food have gone up. But again, paychecks are now growing by more than costs, allowing shoppers to catch up.