A recent analysis by China International Capital Corporation (CICC) suggests that the U.S. may experience a one-time price spike in the coming months, marking a shift from the sustained inflation observed between 2021 and 2022. This moderate inflation data holds positive implications for the Federal Reserve, though officials are unlikely to make significant decisions solely based on a single month’s worth of data. The current labor market remains strong, prompting the Fed to remain cautious about interest rate cuts, preferring to analyze various economic indicators before making any changes. With the Federal Open Market Committee (FOMC) scheduled for a meeting next week, CICC anticipates slight increases in inflation projections compared to those seen in March. Notably, this anticipated rise doesn’t account for reciprocal tariffs. However, factors like employment stability and easing trade tensions are contributing to a more optimistic view of growth. Consequently, Federal Reserve Chair Jerome Powell’s stance at the upcoming meeting might lean towards hawkishness, potentially disappointing investors expecting rate reductions.