Interpret PPI a bit, I forgot to check it yesterday, previous value 0, expected 0.2, actual value 0.9

Among them, the service industry is 1.1% (accounting for 75%), investment portfolio management fees 5.8%, trade: 2%, air tickets 1%, vegetables: 38.9%, eggs 7.3%

Unemployment benefits are 224,000, previously 225,000

PPI has risen but CPI has not mainly because many are exports, which have not affected the domestic CPI in the U.S. Overall performance suggests that future PPI will impact CPI; if CPI rises, the number of people on relief will decrease, indicating relatively better employment, and the Federal Reserve has no reason to cut interest rates.

Why is Trump pushing the Federal Reserve to cut interest rates? In July, tariff revenue was 26.7 billion, and the treasury is starting to have a surplus. If the Federal Reserve cuts rates by 1%, U.S. debt can save 1 billion per day in expenses. If rates do not decrease, the increase in tariff revenue will fill the gap in U.S. debt.

If rates are cut, the U.S. will not be particularly harsh in tariff negotiations with China and sanctions against India and Russia, allowing for some flexibility to end tariffs! If rates do not decrease, there won’t be much room for negotiation advantage. Now, aside from rare earths, China is starting to use imported soybeans to counter the U.S.

RRP was initially 2 trillion, a while ago I saw there was still 200 billion, now there is only 22.8 billion; the liquidity in the U.S. stock market comes from here.

The money in RRP is from institutions selling U.S. debt, keeping the surplus in banks without moving it, and earning interest.

If there is no rate cut in September, a significant drop is inevitable. If rates are cut, liquidity will still be insufficient because the Federal Reserve has not expanded its balance sheet.

PPI data will make Trump very uncomfortable, while the Federal Reserve remains more at ease, and the overall direction also supports the technical analysis.

Plan a strategy for taking profits on pullbacks!