The latest published Producer Price Index ( PPI ) data has attracted widespread attention in the market. The actual value of 0.9% far exceeds the expected 0.2%, with the service sector experiencing an increase of 1.1%, accounting for 75%. It is noteworthy that portfolio management fees rose by 5.8%, trade grew by 2%, air ticket prices increased by 1%, and the prices of vegetables and eggs surged by 38.9% and 7.3%, respectively.

At the same time, the number of applicants for unemployment benefits has slightly decreased, from 225,000 to 224,000. This series of data reflects the relative stability of the job market.

The rise in PPI has not immediately translated into the Consumer Price Index ( CPI ), mainly because most of the increase comes from export goods, which have not yet affected domestic prices in the United States. However, in the long term, the upward trend in PPI may eventually be reflected in CPI. Considering the potential rise in CPI, the decrease in unemployment claims, and the improving employment situation, the Federal Reserve currently seems to lack justification for lowering interest rates.

There are views suggesting that certain political forces may hope for a Federal Reserve interest rate cut. Behind this appeal may be multiple considerations: first, tariff revenues are starting to bring surpluses to the treasury; second, if the Federal Reserve cuts rates by 1%, it could save about $1 billion a day on interest payments for U.S. debt; finally, a rate cut could create more room for maneuver in international trade negotiations.

However, the Federal Reserve's decisions are not swayed by a single factor. Currently, the balance of reverse repurchase agreements (RRP) has dropped from an early $2 trillion to just $22.8 billion, and this portion of funds has been an important source of liquidity for the US stock market. RRP funds mainly come from funds temporarily idle after institutional investors sell US Treasuries.

Regardless of whether the Federal Reserve chooses to cut interest rates in September, the market may face adjustments. If rates are held steady, it could trigger a significant drop; even if rates are cut, the market liquidity may still be insufficient due to the Fed not expanding its balance sheet.

The latest PPI data undoubtedly puts pressure on decision-makers, while also providing more basis for the Federal Reserve's policy-making. These economic indicators, corroborated by technical analysis, all point to the challenges the market may face.

In this complex economic environment, investors should proceed with caution and develop reasonable profit-taking strategies to cope with potential market fluctuations.