Yesterday’s CPI and core CPI data were both OK, and the market feedback was still good. Today’s PPI data is actually not as high as CPI, but PPI + CPI data can calculate the core PCE data, and core PCE is the data that the Federal Reserve is most concerned about. The 2% that Powell often says is the core PCE to 2%.
The current market expectations are good, basically lower than expectations. If the market expectations can be achieved or lower than market expectations, it means that the core PCE data is likely to be lower than the previous value, which is a good thing for the market.
However, the good estimate is limited. Without the current data, the new adjustment +25% tariff will not be included. It can only be said that if the tariff is not increased, you can see that US inflation is declining, but if the tariff issue is taken into account, the current data will not be very referenced.
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