As you can see in this above table, the sharp monthly rise in gas prices has resulted in big monthly changes in CPI. And for perspective, these monthly CPI changes of around 1% mean that prices in the economy are increasing at a double-digit annualized rate.
Conversely, the April decline in gas prices, gave us what would be a very welcomed (by the Fed) inflation number.
Now, it was the big jump in gas prices in June (of 11%), that gave us reason to believe a hot number was coming last month (and it did).
We head into this CPI number tomorrow, with decline in gas prices.
That's good news, and signals what should be a cooler inflation number.
Add to this, if we get a fourth consecutive lower Core CPI reading (i.e. excluding food and energy … chart below), the stock market should take off. It would build market confidence in the Fed's recent assessment that they have reached the neutral level for interest rates.