2024-02-16 15:00:00
© Reuters.
Investing.com – Interest rate-linked futures traders on Friday trimmed bets that the U.S. central bank will start cutting rates in June after a government report showed the producer price index rose more than expected in January.
Ahead of the report, which showed the core measure of the Producer Price Index rose 0.5% from the previous month, traders placed a roughly 75% probability of a first rate cut by the Fed in June. But after the report, the probability of a June rate cut fell to just over 50%, based on the price of federal funds futures.
Read also:
Meanwhile, Thomas Barkin, president of the US Federal Reserve Bank in Richmond, said a while ago that the CPI data underscores why the Fed needs more confidence to cut interest rates.
Barkin stressed that January’s economic data was chaotic and not good.
The US producer price index rose more than expected in January, further complicating the inflation problem, according to a Labor Department report issued moments ago, Friday.
The measure, a measure of the prices received by producers of domestic goods and services, rose 0.3% during the month. Economists were looking for an increase of only 0.1%, while the previous reading recorded a decline of -0.1% in December.
The index accelerated compared to expectations, but it slowed compared to the previous reading, as it recorded 0.9% for January, while expectations indicated an increase of 0.6%, and it recorded 1% in December.
Read also:
Excluding food and energy, it rose by 0.5%, also against expectations for a rise of 0.1%. While the producer price index excluding food, energy and commercial services rose by 0.6%. It was recorded at 2%, while expectations were at 1.6%, and the previous reading had recorded 1.8%.
The report comes just days after the Consumer Price Index showed that inflation remained steadily high despite the Federal Reserve’s expectations of moderation through the year. The CPI rose 3.1% from a year ago, down from its level in December, but still well ahead of the Fed’s target of 2% inflation.
On a core basis, which the Fed focuses more on as a measure of long-term inflation, the CPI rose 3.9%. Where the CPI differs from the Producer Price Index is that it measures the prices that consumers actually pay in the market.
Read also:
Markets fell sharply after Tuesday’s CPI reading, and there were concerns that a higher-than-expected PPI number would also cause another jolt to interest expectations.
US stock market futures fell after the producer price index report, along with rising yields.
Besides the troubling inflation readings, the Commerce Department reported this week that retail sales in January fell by 0.8%, much more than expected.
——-
As a reader of our articles, you can take advantage of this advantage and get an additional discount on fundamental analysis services and trading strategies on the InvestingPro platform by clicking here and using the sapro2 coupon to get a 52% discount.
InvestingPro will help you identify stock market buying opportunities and how to outperform the trend and other investors to support your investments and profits by:
Pro Pix: Trading lists created through a combination of artificial intelligence and human expertise with proven and guaranteed performance.
-
Pro Tips: Easy-to-understand information to simplify large amounts of complex financial data in just a few words
-
Fair value and health score: two summary indicators based on financial data that allow you to know immediately the potential and risks of each procedure.
-
Exceptional Stock Scanner: Find the best stocks according to your expectations by taking into account hundreds of financial metrics and indicators.
-
Historical data for thousands of stocks: to allow fundamental analysis professionals to dig into all the details themselves.
-
And more other services that you can benefit from, as well as services that we will add in the future.
Don’t be weaker than the market and other investors and join thousands of InvestingPro users to make better decisions in the stock market and review your portfolio to become better every time!
Click here to subscribe and don’t forget to use the sapro2 coupon to get an additional discount
Learn more about the InvestingPro tool here
If you encounter any problem using the coupon, you can contact support immediately from here
1708102955
#interest #expectations #inflation #data…and #Federal #Reserve #reveals #opinion #Investing.com