And as the Fed prepares to move to the sidelines, this question now involves how markets view the central bank outlook and if rates are sufficiently restrictive enough to bring inflation back towards the 2% target.
For the time being, traders are not pricing in any more Fed rate hikes and markets have more or less hinted that they can take in the prospects of a soft landing. And with each passing data point that validates such sentiment, it will give more confidence for risk trades and dollar bears to fan the flames.
The risk to this now is what happens when things don't turn out according to the plan? Now, that's the more interesting part and at least for the time being, there are no guarantees. We can only wait and see what the inflation numbers today will have to offer to this later.