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China has developed new semiconductor chips that are functional for the DeepSeek AI model.
The year-over-year headline CPI was 3.8%, above the 3.7% that was expected.
The year-over-year Core CPI was 2.8%, above the 2.7% that was expected.
Michael Gapen of Morgan Stanley predicts that year-on-year inflation will peak in May or June of the current year.
Michael Gapen of Morgan Stanley predicts the Federal Reserve will not change interest rates for the remainder of the current year.
For the Federal Reserve to consider a rate hike, core inflation would need to move above 3% and towards 3.5% on both a spot and forecast basis.
Catherine Thompson believes China will leverage the United States' distraction in the Middle East to advance its own security agenda, including issues related to Taiwan, during its summit with President Trump.
China holds significant economic leverage over the U.S. through its control of supply chains for rare earth elements, critical minerals, and active pharmaceutical ingredients.
The Trump administration allowed the sale of NVIDIA's H-200 GPUs to China last year, a decision made against opposition from within the administration, Congress, and the national security community.
Elizabeth Economy predicts China will not make a military move on Taiwan before the 2028 Taiwanese election, as President Xi prefers a peaceful resolution and believes the KMT party may win power.
Taiwan produces over 90% of the world's most advanced semiconductor chips, which are essential for U.S. commercial and military applications.
The month-over-month Core CPI was 0.4%, higher than the median estimate of 0.3%.