On May 21, Zhao Yaoting, Global Market Strategist for Pacific Ex-Japan at Invesco, stated that the US consumer price index (CPI) for April was in line with expectations and did not unexpectedly rise, which was a relief considering inflation data had been exceeding expectations for several months. Both core and overall CPI in April continued to slow down, dispelling concerns about a resurgence of inflation in the US. Additionally, retail sales data for the month came in below expectations, confirming that the anti-inflation process is back on track and growth is beginning to decline. Without a doubt, the inflation and growth data for April were the first since the beginning of the year that could prompt the Federal Reserve to hike interest rates earlier rather than delay them. It is worth noting that housing inflation in April (which accounts for about 42% of the CPI) finally eased, and prices of core goods such as cars also saw declines. Moreover, the disappointing retail sales data for April, which only rose by 0.0% month-on-month (expecting a rise of +0.4%) and previous data being revised downward, indicates softer consumer spending in the US than previously expected. Negative revisions could further weaken the already weak first-quarter GDP. In addition, based on recent comments from Chairman Powell, Zhao Yaoting believes that the first rate cut will still likely occur in September. However, if the anti-inflation process continues in May and June, the Federal Reserve may act sooner than expected by the market, possibly starting rate cuts in July. For investors in the Asia-Pacific region, Zhao Yaoting expects that US bond yields will decline in the coming months, and the US dollar will weaken. This suggests that emerging market assets, especially Asian emerging market assets like currencies and stocks, are likely to rise starting in the mid-year. In the US, with inflation expectations declining, especially with the slowdown in CPI data, cyclical and small to medium-sized companies may perform well. From a fundamental standpoint, compared to the US, Zhao Yaoting favors emerging markets and Asian emerging market stocks, as US stocks are already at their peak. For US stocks to continue rising, core CPI inflation would need to significantly decrease from the April data, allowing the Federal Reserve to potentially implement more aggressive rate cuts this year.