Inflation remains persistent, with key indicators above expectations. Core CPI rose 0.4% monthly and 3.8% annually, driven by energy and shelter costs. Despite some price declines, such as medical care, inflation remains above the Fed's 2% target. The Fed may delay lowering interest rates until it achieves greater confidence in inflation's decline. Strong job growth and consumer spending, while positive for the economy, also raise concerns about inflation's resilience.
China experienced inflation in February (0.7% year-on-year) after months of deflation. Despite this, some analysts believe deflation still looms and consumers remain cautious. However, Shaun Rein of China Market Research Group suggests investors consider re-entering the Chinese market as valuations are low. China's economic challenges over the past year have led to declines in stock markets, but Rein believes long-term growth prospects are promising, especially in domestic neighborhood electric vehicle manufacturers.
