US CPI Preview: Root Cause of Inflation Extends Far Beyond Oil, Sticky Inflation May Not Fade Quickly

Odaily Odaily reports that the market expects the US overall CPI annual rate for May to rise to 4.2% (previous value 2.4%), with the monthly rate falling to 0.5%. This would be the first time CPI has surpassed 4% since May 2023, and the highest reading since April 2023. The rise in overall inflation is mainly attributed to higher energy costs driven by the Iran war. However, the core CPI annual rate, which excludes food and energy, is also expected to rise to 2.9%, with the monthly rate falling to 0.3%. There is growing concern that inflation is broadening: rising oil prices are transmitting to various sectors of the economy, and inflation may not dissipate quickly. Charles Schwab's Chief Investment Strategist Saunders stated: "This is not just an oil issue; it also involves money supply and is increasingly related to AI. The inflation problem is broader than just energy, meaning inflation could remain sticky." She noted that investor sentiment is tense primarily due to inflation, and if the data worsens more than expected, the stock market will come under pressure. The Trump administration believes inflation will recede after the Middle East war subsides. However, Saunders believes supply has been severely disrupted, "Even if the war ends quickly, it will be difficult for oil prices to return to previous lows. This is not a reset button." (Jin Shi)