“This was unequivocally a good report, a delightful appetizer while we await the main course later on today,” Olu Sonola, Fitch Ratings’ head of U.S. economic research, told Fortune via email, referencing Federal Reserve Chair Jerome Powell’s eagerly anticipated press conference after the Federal Open Market Committee meeting Wednesday afternoon.

Core inflation, which excludes more volatile food and energy prices, also came in below economists’ expectations in May, rising 0.2% month over month (the lowest since September 2021) and 3.4% from a year ago, compared with the forecast for 0.3% and 3.5%. Some of the major contributors to inflation last month were shelter prices, which jumped 0.4% in May and 5.4% from a year ago; food prices, which rose 0.1% in May and 2.1% from a year ago; as well as motor vehicle insurance, which fell 0.1% in May, but was still up more than 20% on an annual basis. Meanwhile, gasoline and airfare prices, which fell 3.5% and 3.6% year over year, respectively, pulled inflation in the other direction.

Wall Street was quick to celebrate the cooler-than-expected inflation report, particularly its implication for Federal Reserve policy. Both the S&P 500 and the tech-heavy Nasdaq soared more than 1% by 10 a.m. ET Wednesday, while the Dow Jones industrial average was up 0.6%. The 10-year Treasury yield also fell 0.1% to around 2.3%, hinting that fixed-income investors are expecting rates to fall.

“Wednesday’s weaker-than-expected CPI will allow the Fed to start cutting interest rates as soon as September,” Skyler Weinand, chief investment officer at the registered investment advisor Regan Capital, told Fortune via email. “We have now seen multiple encouraging inflation readings, after the concerning spike in inflation earlier this year.”

Ever since the Federal Reserve began lifting interest rates to fight inflation in March 2022, effectively raising borrowing costs for businesses nationwide, stock market investors have been looking forward to a shift in policy. At the start of the year, many of Wall Street’s top forecasters were expecting just that in 2024, penciling in as many as six interest-rate cuts. But those hopes were dashed after three hot inflation reports spooked the Fed this spring.

Now, though, some believe the latest inflation report may finally provide Fed Chair Powell and company with enough evidence to begin their market- and economy-juicing rate-cutting cycle. The likelihood of a July interest rate cut is still slim, but, as Weinand noted, September is a prime candidate.

The bond market is now pricing in a roughly 70% chance of a September rate cut, more than reversing the drop to 50% that was seen after the hot jobs report just last week, according to CME’s FedWatch Tool, which tracks Fed futures contracts.

Still, not everyone is convinced rate cuts are now a certainty. Ashwin Alankar, head of global asset allocation at Janus Henderson Investors, said that although the CPI report will enable the Fed to consider a “precautionary cut” later this year, Chair Powell and company still have their reputation to uphold, and they don’t want to lose the fight against inflation after years of work. That will likely keep Powell on the data-dependent, wait-and-see script at his press conference after the Federal Open Market Committee meeting Wednesday afternoon.

“At this stage, there is no greater goal than Fed credibility to keep inflation expectations anchored, economic activity robust, and financial markets friendly,” Alankar told Fortune via email. “Until greater disinflation evidence is seen both in breadth and depth, today’s softness is supportive of a preemptive cut rather than a pivot in Fed policy towards accommodation.”

Lindsay Rosner, head of multi-sector investing at Goldman Sachs Asset Management, echoed Alankar’s comments, warning that the Fed will need more than one cool inflation report to cut rates. “It does remain challenging, however, for inflation to cool with the backdrop of the summer’s heat. Let’s see what the Fed forecasts this afternoon. This is good news, but we will need more of it,” she told Fortune via email.