The latest data released shows that the U.S. consumer price index (CPI) for July fell to an annual rate of 2.9%, with core CPI dropping to 3.1%, both hitting new lows in nearly a year and significantly below market expectations. This data reflects a further easing of inflationary pressures, providing important reference for the Federal Reserve's future monetary policy decisions.

After the data was released, the financial market's expectations for the Federal Reserve possibly cutting interest rates ahead of schedule significantly warmed up. However, Federal Reserve Chairman Powell appeared relatively cautious in his subsequent public speech. He acknowledged that the improvement in inflation data is encouraging, but emphasized the need for more evidence to confirm whether inflation can sustainably fall back to the target level of 2%. Powell reiterated that the Federal Reserve's policy direction will continue to depend on the performance of economic data, implying that there is still uncertainty regarding the specific timing of any rate cuts.

Nevertheless, Powell's relatively moderate remarks have still boosted market sentiment. As a result, the Dow Jones Industrial Average set a historical high this week, reflecting investors' optimistic expectations for the economic outlook. Currently, the futures market generally believes that the Federal Reserve may start cutting interest rates as early as September or November this year.

However, market participants still need to remain vigilant, as the persistence of inflation trends and the resilience of economic growth will be key factors influencing the Federal Reserve's decisions. Economic data in the coming months will provide more guidance for policymakers and investors to help determine the best timing for a shift in monetary policy.