U.S. April Inflation Remains Elevated Amid Middle East Conflict, Citic Securities Reports

Citic Securities reported on May 13 that U.S. inflation in April continued to run hot, with the spillover effects of the Middle East conflict persisting. According to Jin10, the compensatory rise in rental inflation has pushed up core readings. High inflation continues to erode the real purchasing power of American households, with low-income families facing stronger cost shocks. Real hourly wages have returned to negative growth year-on-year for the first time in three years. Citic Securities believes that the risk of a second inflation wave in the U.S. is minimal, but high oil prices will limit the potential for inflation rates to fall within the year. The baseline scenario still anticipates a 25 basis point rate cut by the Federal Reserve this year. U.S. Treasury bonds are currently more suitable for trading opportunities, while U.S. stocks, nearing the end of a strong earnings season, should be watched for short-term profit-taking risks. The U.S. dollar index may experience weak fluctuations below 100 but is not expected to decline continuously.