Delayed CPI Shows Slight Inflation Drop Ahead of "Enormous" Week

Inflation Data Summary - The Consumer Price Index (CPI) rose by 0.3% overall, with a core increase of 0.2%, indicating lower-than-expected inflation levels [1][3] - Year-over-year CPI is at 3%, which is better than the consensus expectation of 3.1% [3] - Energy commodities increased by 3.8%, while gasoline prices rose by 4.1%, despite a 9% drop in crude oil prices [4][7] Shelter and Vehicle Prices - Shelter costs increased by 0.2%, with owner's equivalent rent rising by only 0.1%, marking the smallest increase since January 2021 [4] - Used car prices decreased by 0.4%, while new vehicle prices increased by 0.2% [5] Market Reactions - The overall inflation report is viewed positively by the futures and bond markets, suggesting a benign inflation environment [8] - The Federal Reserve can now focus on the labor market, as inflation is not rising as previously feared [5][8] Upcoming Market Events - A significant week is anticipated for the markets, with a Federal Reserve meeting and earnings reports from major companies [10][12] - Geopolitical developments, particularly the meeting between President Trump and President Xi, are also expected to influence market dynamics [11][12]