In the June CPI, including stubborn service inflation such as housing costs and transportation/medical expenses, with all sub-items showing widespread inflation, the market has begun to further price in an accelerated arrival.

For the rest of this year, the Federal Reserve still has four meetings in July, September, November, and December. Currently, the market has already accelerated expectations of rate cuts to the upcoming July meeting, with one rate cut each in July, September, and December.

However, interestingly, despite inflation cooling more than expected and the market pricing in earlier and larger rate cuts, the high-valuation "Magnificent Seven" turned downward after a big rally, while funds started flowing into the Dow Jones and Russell 2000. From a trading perspective, the market is actually pricing in the "expectation of expectations," seemingly believing that traditional industries and small businesses would fare better in an early rate-cut scenario, allowing the economy to achieve a smooth landing.