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The Federal Reserve’s favorite inflation gauge cooled in October. For Wall Street, it’s yet another sign that the central bank’s chairman, Jerome Powell, may be willing to end his more than 20-month-long interest rate hiking campaign sooner rather than later.

That’s great news for consumers and businesses, which have struggled to cope with rising borrowing costs and inflation over the past few years. Fast-growing companies, in particular, often rely on debt to invest in their expanding businesses, and the end of interest rate hikes would remove a significant earnings headwind for them going into 2024. The prospect of interest rate cuts would be even better for their shares. Not only would many companies get a boost to earnings due to lower borrowing rates, but investors’ alternatives to stocks—mainly Treasuries and corporate bonds—would provide a lower return. That would mean more money flowing into the stock market.

The signs of a turnaround in inflation were clear in the latest inflation data released Thursday. The personal consumption expenditures (PCE) price index rose by less than 0.1% in October, and just 3% from a year ago, the Bureau of Economic Analysis reported. That’s compared with a 3.4% year-over-year jump in September. Meanwhile, core PCE inflation, which excludes more volatile food and energy prices, rose just 3.5% from a year ago in October, down from 3.7% the previous month.

“The further decline in core PCE inflation in October will reinforce the growing belief in markets that interest rate cuts are on the horizon,” Capital Economics’ deputy chief U.S. economist, Andrew Hunter, said of the data in a Thursday note.

With commodity prices falling more than 5% so far this year, businesses have begun to reduce prices of physical goods after years of pandemic-induced inflation. In October, that trend continued with goods prices dropping 0.3% during the month, according to the PCE price index. That drop was offset by an 0.2% rise in services prices amid record domestic travel for the holiday season. But even services inflation—a category that includes a mix of components like tuition prices and shelter, transportation, and medical service costs—is showing signs of slowing.

October’s data showed reduced spending on restaurants, bars, and hotels compared with September, when services prices rose 0.3%. And year-over-year services inflation has fallen from its 2023 peak of roughly 5.8% to just 4.4% last month. That could signal the end of the Fed’s interest rate hikes.

“If you are hoping Jay Powell continues to be hawkish in the coming months, the PCE services index is not your friend,” Jamie Cox, managing partner at Harris Financial Group, said Thursday, downplaying the likelihood of more interest rate hikes. “There is significant deceleration in inflation afoot. These data solidly mark the end of the rate cycle.”

Throughout the pandemic, lockdowns and supply-chain chaos led to mass goods inflation, but over the past few years, services inflation has rebounded due to Americans getting back to traveling and eating out. In response to this shift in consumer spending, Fed officials have emphasized combating services price increases. And the latest inflation data has given many on Wall Street hope that the central bank is making progress toward this goal.

“Markets could end up pleasantly surprised as inflation could cool faster than expected,” Jeffrey Roach, chief economist at LPL Financial, said Thursday. “Investors should expect additional Fed officials to tweak their language as they prepare markets for a subtle shift in policy stance.”

Despite Wall Street’s hopes that the Fed will either end its interest rate hikes or even cut rates, Chair Powell has yet to make more dovish remarks. At an early November International Monetary Fund event, he told reporters that he remains “committed” to achieving the central bank’s 2% inflation target by ensuring interest rates are “sufficiently restrictive.”

“We are not confident that we have achieved such a stance,” he added.

Some Fed officials seem to be coming around to the idea that further interest rate hikes are no longer necessary, however. Atlanta Fed President Raphael Bostic said earlier this month that he believes interest rates are now “sufficiently restrictive to get us to the 2% level for inflation.”

And Fed Governor Christopher Waller said Tuesday at an American Enterprise Institute event that he is “increasingly confident that policy is currently well positioned to slow the economy and get inflation back to 2%.” Waller, who is generally regarded as a more hawkish Fed official, went on to argue that if inflation continues to fade, the Fed “could then start lowering the policy rate.”

Of course, not every Fed official is convinced that inflation has been tamed. New York Fed President John Williams said Thursday at a New York Fed, Federal Reserve Bank joint conference that although “meaningful progress” has been made in slowing consumer price increases and “restoring balance” to the economy: “Our work is not nearly done.”

“I am committed to achieving our 2% longer-run inflation goal, creating a strong foundation for our economic future,” he added.

There are also still skeptics of the recent disinflationary trend on Wall Street. Brian Rose, senior U.S. economist at UBS Global Wealth Management, said Thursday that the Fed will need to keep its “bias” toward higher interest rates to ensure inflation is truly under control. “Fed Chair Jerome Powell will make a public appearance on Friday, and we expect him to be careful to avoid sounding too dovish,” Rose argued.

However, even Rose noted that if inflation and the labor market continue to cool this month, the Fed could “move to a neutral stance”—or end its rate hikes—by the end of January.