Tomorrow at 8:30 pm - CPI data will be announced!

Recently, the "Wall Street Journal", which is the vane of the Federal Reserve's policy, has quietly released a signal that Powell may accelerate the pace of interest rate cuts, especially in view of the gradually weakening labor market conditions.

In addition to employment data, CPI (Consumer Price Index), as a key indicator of inflation levels, also has a profound impact on expectations for interest rate cuts. I am personally cautiously optimistic about the upcoming CPI data for the following reasons:

1. Energy prices have stabilized and declined slightly: Crude oil and natural gas prices are currently stable with some decline, providing room to alleviate overall inflationary pressure.

2. Food inflation has fallen significantly: Since the peak of 11% in 2020, the food inflation rate has steadily declined to the current level of about 2%, showing a clear downward trend and remaining at a relatively low level.

3. Core CPI hit a four-year low: Core CPI (an indicator of inflation excluding food and energy) fell to its lowest point in four years, further confirming the reduction in inflationary pressure.

4. The housing market turns to a buyer's market: With the deterioration of the job market and the decrease in the number of full-time employees, the rental market is beginning to show signs of changing from a seller's market to a buyer's market. Rental costs are expected to be controlled, further reducing inflationary pressure on the cost of living.

The CPI data released tomorrow is very likely to show a positive trend, providing strong support for the implementation of the Federal Reserve's interest rate cut expectations, which is undoubtedly good news for the market.

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