The latest inflation data is fueling optimism in the stock market rally, with experts pointing to falling inflation as a key driver of the bull market. Wall Street analysts like Julian Emanuel of Evercore ISI and Jonathan Golub of UBS Investment Bank are raising their year-end price targets for the S&P 500, citing promising inflation trends and potential interest rate cuts. Recent data, including soft readings for consumer and wholesale prices, suggests a positive outlook for inflation, potentially leading to rate cuts. Economists believe the Federal Reserve's preferred inflation gauge, the Personal Consumption Expenditures index, will show positive results. This data, combined with strong labor market figures, could lead to an easing cycle beginning in September. Despite the Fed's forecast of only one rate cut in 2024, markets are increasingly pricing in two cuts, indicating growing confidence in the potential for further monetary policy action. Wall Street strategists believe recent inflation data may have already outdated the Fed's projections, highlighting the ongoing uncertainty surrounding interest rates and the economy's trajectory.