As much of America dusts off the grill to kick of the first unofficial weekend of summer, the stock market has one more worry session to get through before all can relax for a while. A speech from Federal Reserve Chair Janet Yellen and the announced consumer inflation data (CPI) will guarantee that traders on the Street will have more to focus on today than in years prior. Although trading desks will be lightly staffed, all eyes and ears should be on Fed Chair Janet Yellen’s speech in Rhode Island which began at 1:00PM EST. Over in Europe, the European Central Bank (ECB) President Mario Draghi reiterated his call to euro zone countries to reform their economies in light of the stress befalling Greece. At the same time, the Chinese stock market came roaring back overnight, continuing its yearlong rally and renewing optimism among consumers.

In advance of Yellen’s speech, the market was busy digesting the consumer price index (CPI) report, and it’s not what the Street wanted. It’s apparent that many hawks in the Fed will advocate pulling forward the rate hike where a benign CPI headline reading, up only 0.1% for April, covers up a lot of the pressure in the various component. When food and energy prices are excluded from the CPI, core prices rose 0.3%, which doesn’t seem like much except it’s outside the high-end of economist forecasts for 0.2%. The year-on-year rate for the core is at +1.8% which, after dropping to 1.6% earlier in the year, is now closing fast on the Fed’s general inflation target of 2.0%. Readings are showing pressure outside of the realm of energy including medical costs and education costs which are up 0.7% and 0.5%, respectively. Shelter costs, which reflect higher rent prices, came in at +0.3% for the third time in the last four months, which is the strongest rise in rents since late 2006 and early 2007. Gains were also present in the prices of furniture (+1.3%) and used cars (+0.6%). Oil prices have been on the rise, but not energy costs, at least in the April report where prices fell by a heavy 1.3% while gasoline fell 1.7% in the month. Ultimately, these emerging price pressures through the bulk of the consumer economy are now, more than ever, raising the risk that inflation might be brewing after all. We shall see in the not so distant future what Yellen and the Fed decides.