- Prior month 2.3% revised to 2.4% YoY. MoM 0.0%
- PPI MoM 0.9% vs 0.2% est
- PPI ex food and energy MoM 0.9% vs 0.2% estimate. Last month 0.0%
- PPi YoY 3.7% vs 2.9% estimate. Last month 2.3%
- PPI ex food and energy 3.7% vs 2.9% estimate. Last month 2.6%
- PPI ex food and energy and trade YoY 2.8% vs 2.5% last month
- PPI ex food and energy and trade 0.6% vs 0.0% last month.
Details:
- Final demand services rose 1.1% vs -0.1% last month
- Final demand goods rose 0.7% vs 0.3% last month
- Final demand trade services 2.0% vs -0.3% last month
Looking at the Fed expectations.
- 58 basis points of cuts between now and the end of year vs 63 prior to the report
- 93% chance for a 25 basis point cut in September
IN the US debt market:
- 2 year 3.713% +2.9 basis points
- 10 year 4.248% +0.6 basis points
- 30 year 4.827%, -0.1% basis points
US stocks are lower
- Dow -167 points
- S&P -30.08 points
- Nasdaq -129 points
Advantage Powell for his inflation concerns.
The tariffs collected have to paid by someone and here it is. The PPI is showing increased costs. The CPI was less impacted suggesting that there is a disconnect that is so far being paid by the producer with some to the consumer. That is not good for earnings generally and there has been some companies that have reported forward guidance that is more sanguine even though they may have beat.
How it impacts the Fed?
So far, the market is modestly off the 100% September cut from yesterday to 93% today, but still largely expect a cut. The ultimate question is will the Fed see through the rise as the one-time increase? Do they feel they are too restrictive? Are they concerned about jobs?
