So why did market react positively to today’s data despite inflation being up? 1. The fears got overblown. Expectations went to no cuts or one cut from initial three cuts. Adding to that was uncertainty about Trump policies and how tariffs would inflate the prices. 2. PPI came below the forecats yesterday from which some of the data is used to construct PCE which is the primary inflation measure for FED. Coupled with not so high CPI data could mean the PCE rise will not be too dramatic. 3. And most importanly so far the forecast points to a lower inflation number coming in January which could further alienate the fears of sticky inflation. Next important dates are the first day of Trump administration , to see which executive orders he signs, followed by the employment data and FED meeting at the end of the month.