TechFlow news, May 14 — According to Jinshi Data, CITIC Securities research report stated that the U.S. April CPI rose moderately and below expectations year-on-year. However, prices of furniture, appliances, toys, and other goods appear to have started reflecting the impact of White House-imposed tariffs. The overall year-on-year increase of 2.3% this time may already mark the annual low for this year. Based on our static estimates, assuming the White House's tariff measures since the beginning of the year remain unchanged after the China-U.S. joint statement on May 12, they could cumulatively raise the U.S. PCE deflator by approximately 0.85% and, in the long term, reduce the size of U.S. GDP by about 0.3%. The Trump administration would need to cut U.S. prescription drug prices by at least an average of 30% to offset the inflationary impact of its tariff policies. The "ceiling" and "floor" for U.S. tariff levels are becoming increasingly visible, and trade policy visibility is recovering—this is positive for risk assets such as U.S. equities. The dollar may also find near-term support, while we remain relatively cautious on U.S. Treasuries.
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