I woke up and it was already two thirty in the morning 😂

Tonight, the CPI data for April in the United States was announced, which stands in stark contrast to the rapidly rising U.S. stock market. The expectation of rising inflation has been mentioned almost every day, but the market simply does not believe it, as AI is currently the hot topic.

The broad inflation that the public cares about was 3.3% last month, the market expectation had already risen to 3.7%, while the actual announcement was 3.8%.

The rise in inflation directly leads to the Federal Reserve's assessment of interest rate cuts being postponed. In simple terms, cutting rates has become more difficult; if inflation continues to rise, it is even possible that rates will not be cut in 2026. This is not good news for the overall market, even AI may stall in the face of high inflation.

The primary reason for inflation's rise is the increase in energy inflation, mainly driven by gasoline and fuel oil. This is what we have been saying all along; the blockade of the Strait of Hormuz has the most direct impact. Today, the price of WTI has already returned to $102. If Trump cannot solve the "oil" problem, there is no need to consider anything else.

And it doesn’t stop there. The Federal Reserve, led by Powell, has always believed that the rise in inflation is due to tariffs. If Trump lowers or cancels tariffs, it would greatly help with inflation. This is why Powell was previously optimistic about inflation. However, now that there has been no resolution between Iran and the U.S. for such a long time, the Fed may have to reevaluate the inflation situation. After all, even with current inflation in the Strait of Hormuz, it will take some time for oil prices to decrease.

Overall, rising inflation is a bad thing for the entire risk market.

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