“Reducing policy restraint too late or too little could undu...

“Reducing policy restraint too late or too little could unduly weaken economic activity and employment,” said Powell, speaking to the Senate Banking Committee as part of his semiannual address to Congress on Tuesday. He continues his testimony Wednesday before the House Financial Services Committee. “More good data would strengthen our confidence that inflation is moving sustainably toward 2%,” Powell added.

Wednesday marks a light day for economic data, with a final wholesale inventories reading for May due ahead of the June consumer price index reading on Thursday. The June producer price index will follow on Friday.

Many view the upcoming CPI print as a key test for the market and the outlook for rate cuts.

“If we get a cooler print on CPI this week and if get a cooler print on PPI, September will get priced in as a lock,” Liz Young Thomas, SoFi’s head of investment strategy, said on CNBC’s “Closing Bell” on Tuesday, cautioning that at some point, cooler data may become too cool.