The signal of cooling inflation in the United States is shifting from a single data point to a trend of mutual verification. The June CPI released the day before, which was 3.5% year-on-year and lower than market expectations, decreased by 0.4% month on month, setting a rare negative growth in recent years; The latest released June PPI was 5.5% year-on-year, also lower than the expected 6.2%, a decrease of 0.3% month on month, and the core PPI only increased by 0.2% month on month. Moreover, multiple historical PPI data have been revised downwards, which means that the inflationary pressure in the past few months is actually milder than what the market saw at that time. The cooling of inflation did not only begin in June, but has been going on for some time. PPI reflects the production costs of enterprises, CPI reflects the consumer prices of residents, and the PCE released at the end of the month is the inflation indicator that the Federal Reserve is most concerned about. When PPI and CPI release cooling signals simultaneously for two consecutive days, it means that the probability of PCE continuing to fall in the future is increasing. Therefore, after the data was released, the market quickly lowered its expectations for interest rate hikes, and US bond yields fell, giving risky assets breathing space. However, Walsh made it clear that he would not be overly optimistic about inflation just because of a few favorable data points, and Waller reiterated that if inflation stagnates or even rebounds again, raising interest rates is still an option. The cost of misjudging inflation in 2021 is too high, and now the Federal Reserve believes more in trends rather than monthly data. What is truly worth paying attention to next is the PCE at the end of the month and the continuously rising oil prices. If PCE continues to fall, market concerns about interest rate hikes will further cool down. If oil prices push up inflation again, the hawkish stance of the Federal Reserve is likely to gain the upper hand again. At present, it is a good thing for AI, US stocks, and BTC, as the market always trades on liquidity expectations.