US CPI Outlook: The Root of Inflation Extends Far Beyond Oil, Stickiness May Be Slow to Fade

Odaily Planet Daily News The market expects the US headline 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 exceeded 4% since May 2023, and the highest reading since April 2023. The rise in headline 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 are growing fears that inflation is spreading: rising oil prices are being transmitted across various sectors of the economy, and inflation may not dissipate quickly. Sanders, Chief Strategist at Charles Schwab, stated: "This is not just an oil issue; it also involves the money supply and is increasingly related to AI. The inflation problem is broader than just energy, implying that inflation is likely to remain sticky." She noted that investor sentiment is primarily tense due to inflation, and if data worsens beyond expectations, the stock market will come under pressure. The Trump administration believes inflation will recede after the Middle East conflict subsides. However, Sanders believes supply has been severely disrupted. "Even if the war ends quickly, it will be difficult for oil prices to return to previous low levels. This is not a simple reset." (Jinshi Data)