JPMorgan Asia-Pacific (excluding Japan) Global Market Strategist Zhao Yaoting expressed his views on the US March CPI data. He pointed out that inflation in the US in March was disappointing. According to data from the Labor Department, the core Consumer Price Index (CPI) rose by 0.359% month-on-month in March, while the market had generally expected 0.3%. "Sticky inflation" seems to have returned to the US economic dictionary, which is certainly not a situation the market wants to see. The rebound in core CPI in January and February was mainly due to seasonal adjustments, while March was the first "pure" CPI report of the year, so the rising data in March is particularly worrying. In terms of inflation within the month, the increase was mainly driven by a 0.65% rise in non-housing service prices, as well as inflation in categories such as car insurance, car repairs, and medical services. These categories reflect the "trailing tail" part, which reflects situations that have already occurred (higher car prices, higher housing costs are declining or likely to decline). Some costs reflect situations that have already occurred, such as housing costs and higher car costs, which are considered trailing costs as they reflect situations that have already occurred, and overall these costs are on a downward trend. However, this also includes other costs, such as medical and other service costs, so the trend in the coming months is still difficult to predict. Most of the rising data still comes from car insurance, which surged by 2.58% month-on-month and 22.2% year-on-year. Overall, car insurance made a 0.14% contribution to the core CPI in March, which was a major reason for the CPI exceeding market expectations. The surge in car insurance premiums is due to the fact that car prices and related maintenance costs have already risen, which cannot generally reflect the broader inflationary pressures currently faced by the economy. On the other hand, this is not Personal Consumption Expenditure (PCE) data, and PCE is a better reflection of inflation dynamics, as well as a key inflation indicator favored by the Federal Reserve. The upcoming Producer Price Index (PPI) report may adjust the trend of PCE in March. In conclusion, the current acceleration of US economic growth, tightening labor market, and seemingly persistent inflation without continuing to fall, or even potentially rising (depending on the yet-to-be-released core PCE data) is the reason for the decline in the US stock market and the rise in the US dollar. If this situation continues, it may be an opportunity to buy low, as long as there is no evidence of accelerating wage growth (data has not yet been released), stronger economic growth and employment conditions will be beneficial to corporate profits. If the US economic growth and job market continue to accelerate, inflation may rebound, and the dollar will strengthen, which may force the Bank of England and the European Central Bank to change their recent dovish stance - although signs of accelerating inflation in these markets are not evident. Although this does not completely rule out the possibility of a rate cut by the Federal Reserve in June, the strong trend of US CPI inflation undoubtedly reduces this possibility. If Fed officials begin to make more hawkish remarks, it is also expected. In any case, even if there is no rate cut but the economy maintains strong growth, it is more favorable for risk assets than a rate cut but weak economic growth and falling inflation.