U.S. July inflation data basically met market expectations. Consumer prices rose 3.4% year-over-year, slightly down from the previous 3.5%, and increased 0.1% month-over-month, also in line with estimates. Core CPI, excluding food and energy, rose 0.2% month-over-month and 2.5% year-over-year, both aligning with market predictions. This data indicates that U.S. price growth continues to slow, but it’s still far from the Federal Reserve’s ideal level. For the market, the key isn’t just whether inflation is “cooling,” but whether the pace of cooling is fast enough to support a quicker shift to easing. After this data release, traders will keep an eye on the Federal Reserve’s stance at the next rate meeting. The tug-of-war between inflation readings and rate cut expectations remains one of the main factors influencing U.S. stocks, the dollar, and Treasury yields. If inflation continues to decline at the current pace, the market’s expectations for the number and timing of future rate cuts may adjust further. On the other hand, if price pressures persist, the duration of high interest rates could be extended.