Stocks closed solidly higher yesterday with all of the major indexes up 1% or better. And once again, the S&P and Nasdaq each made another new all-time high.

Yesterday, Fed Chair Jerome Powell, in day 2 of his Semiannual Monetary Policy testimony, this time to the U.S. House Financial Services Committee (on day 1 he spoke to the U.S. Senate Committee on Banking, Housing, and Urban Affairs), essentially repeated what he said the day before: that there's been considerable progress on inflation, that the economy is doing well, and that the job market, is strong but not overheated.

And he reiterated that the Fed remains data dependent, and that they'd like to see more good inflation reports in order to have a greater degree of confidence that inflation is on a sustainable path back to 2% before cutting interest rates.

He also cited the Fed's dual mandate of price stability (moderate inflation) and to promote maximum employment. He acknowledged that these two items are more balanced now than they were previously, but that they're watching for signs of slowing, saying that "reducing policy restraint too late or too little could unduly weaken economic activity and employment."

While no timeline was given on when the Fed will cut rates, they recently forecast 1 rate cut by year's end, with Fed Funds traders putting odds on September at the earliest, but more likely November or December.

His comments were interpreted bullishly, just like the day before.

But given the Fed's data dependence, all eyes will be on this morning's Consumer Price Index (CPI) inflation report.

Last month's core rate (ex-food & energy) came in at 3.4% annually, down from the previous month's 3.6%, and well below their peak from 2 years ago at 6.6%.

Today's consensus is for the headline number to be up 0.1% m/m vs. last month's 0.0%, with the y/y rate at 3.1%, down from last month's 3.3%. The core rate is expected to be up 0.2% m/m, just like the previous month, while the y/y rate is expected to be up 3.5% vs. last month's 3.4%. That comes out at 8:30 AM ET.

We'll then get another look at inflation tomorrow with the Producer Price Index (PPI) inflation report.

But first things first. Today it's the CPI. And we'll also get Weekly Jobless Claims.

Should be a busy day.

See you tomorrow,