Yesterday's CPI and core CPI data were both quite good, and the market's response has been pretty positive. Today's PPI data doesn't attract as much attention as CPI, but the combination of PPI and CPI data can be used to infer the core PCE figures, which is the data the Federal Reserve focuses on the most. Powell often mentions that the target is for core PCE to reach 2%.
Currently, market expectations are optimistic, mostly below expectations. If the results can meet or fall below market expectations, it would likely indicate that core PCE data may be lower than previous values, which would be a good thing for the market.
However, optimistic estimates are limited. The current data does not include the newly adjusted +25% tariffs, so it can only be said that without the tariffs, we could see U.S. inflation decreasing. But considering the tariff issue, the current data's relevance is diminished.
