The CPI data was higher than the previous value and the expected value, exceeding our expectations yesterday. The original plan was to be at most the same as the previous value. Unexpectedly, the data was really released, directly exceeding the previous value by a large margin, and the expectation was adjusted to 3.4% today. Although the CPI data cannot truly reflect the actual inflation situation in the United States, the market expectations of the Fed's interest rate cut have been lowered again under the impetus of this data. The Fed dared to push the PCE index to exceed the previous value, otherwise it would prove that the Fed's inflation work has failed and it has also been slapped in the face.

It is precisely because the CPI data involves inflation and cannot fully reflect the actual inflation situation that the Fed dares to play this way.

The U.S. stock market's reaction is being cleared up, and it fell directly at the opening, but it is expected that it will not fall too much and will rebound. After all, the Fed has been playing with expectations from last year to now, resulting in a decrease in the credibility of the data, and the risk market has become accustomed to it. In addition to emotional digestion, it seems that it cannot bring too terrible a decline.