Market Sentiment & Rate Cut Expectations - The market rally is driven by the anticipation of rate cuts, primarily fueled by momentum rather than fundamental economic improvements [1] - Before the Jackson Hole speech, there was an approximate 10% probability of a 50 basis point rate cut [1] - The Federal Reserve (Fed) is unlikely to acknowledge the conclusion of the inflation battle [1] Monetary Policy & Economic Indicators - The FOMC statement emphasizes that stable prices are crucial for achieving maximum sustainable employment [1] - Initial jobless claims have overshadowed the CPI data, leading the Fed to prioritize the labor market aspect of its mandate [2] - The current CPI level remains too high and is inconsistent with the target of 2% inflation [2] Fed's Potential Actions - If the Fed cuts rates, it will likely be due to negative employment data rather than positive inflation news [2]