The July US PPI released in the evening exceeded expectations, especially with the service sector contributing the most. This is in line with the strong service inflation in the core CPI data released two days ago. PPI is the upstream of CPI, and some of the PPI sub items have a high correlation with the PCE price index calculation favored by the Federal Reserve, which means that the July PCE data released at the end of the month may also exceed expectations. For the market, it is naturally not a good thing, as it has hit the expectation of a September interest rate cut. Last night, Besant also called for a 50 basis point rate cut probability, which should come to nothing. The market is expected to fluctuate in the short term. However, looking at it from a different perspective, the unexpected data in July will greatly increase the market's expectations for CPI and PPI in August, which will greatly reduce the possibility of the August data exceeding expectations, which is actually a good thing. It can also be seen that American companies are adjusting the pricing of goods and services to offset the costs brought by US tariffs. The degree to which enterprises transfer the tariff burden to consumers determines the future inflation trend and is also a key factor affecting the interest rate path.