Last week, markets reacted to mixed inflation data and signs of a softening labor market. The Consumer Price Index (CPI) rose to 2.9% annualized, in line with expectations, while the Producer Price Index (PPI) fell to 2.6%, below forecasts, indicating that inflation remains elevated but generally contained. Labor market data showed downward revisions to job gains and a rise in initial jobless claims, suggesting a cooling trend. Despite inflation staying above the Federal Reserve’s 2% target, markets expect the Fed to cut rates at its upcoming meeting to support employment. Bond yields dropped, with the 10-year Treasury briefly touching 4.0%, and equity markets climbed to record highs, buoyed by hopes of Fed easing and robust AI-driven growth in the tech sector. Consumer sentiment declined, and gold prices surged to new highs.