Wall Street's Scariest Inflation Report of the Year Is Hours Away -- and It Has the Ability to Change the Stock Market's Fortune

The most important inflation report of the year is set to hit the newswires today (June 10) at 08:30 a.m. ET.

The Iran war is having a tangible effect on prices, having pushed trailing 12-month inflation to a three-year high.

A continued rise in Core Personal Consumption Expenditures (PCE) may force the FOMC to shelve its easing bias, which would be a tough pill for a pricey stock market to swallow.

This has been a historic year for Wall Street. The Dow Jones Industrial Average (DJINDICES: ^DJI) , S&P 500 (SNPINDEX: ^GSPC) , and Nasdaq Composite (NASDAQINDEX: ^IXIC) all hit fresh record closing highs last week.

Meanwhile, America witnessed a rare changing of the guard at the Federal Reserve's lead position a few weeks ago. Jerome Powell's second term as Fed chair ended on May 15 , while President Donald Trump's handpicked successor, Kevin Warsh, officially took the reins on May 22.

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Warsh's ascent to Fed chair comes at a precarious time for the U.S. economy and a historically expensive stock market. In just a few hours, at 08:30 a.m. ET, the Bureau of Labor Statistics (BLS) will release the highly anticipated May inflation report. Estimates suggest it'll be the scariest inflation data we've seen this year, and it has the ability to turn the stock market on its head.

To preface this discussion, a modest level of inflation is ideal. Since January 2012, the central bank has targeted long-term inflation of 2%.