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Yahoo
3 days ago
- Business
- Yahoo
Producer prices rise as high tariff costs trickle through supply chains
This story was originally published on CFO Dive. To receive daily news and insights, subscribe to our free daily CFO Dive newsletter. Dive Brief: The producer price index last month rose at the fastest rate in three years, the Bureau of Labor Statistics said Thursday, as costs from the highest tariffs since the 1930s started to trickle through supply chains. The PPI, which measures prices charged by wholesalers, increased a higher-than-forecast 0.9% in July and 3.3% on an annual basis, the BLS reported. 'Now, tariffs are feeding through' the supply chain from wholesalers to retailers and beyond, Kansas City Federal Reserve Bank President Alberto Musalem said. 'Companies told us that it would take about three to six months to pass on the costs' from import duties, Musalem said. 'We're right around that three-month mark,' he said in a CNBC interview. Dive Insight: Musalem and other Fed officials confront data that challenges their congressional mandate to ensure both price stability and full employment. The job market in recent months has weakened, with the three-month average in payroll gains slumping to 35,000 from an average of 127,000 from February through April. Meanwhile, core inflation, excluding volatile food and energy prices, rose at a 3.1% annual rate last month after a 2.9% gain in June, with a resurgence in the cost of services including transportation and medical care fueling much of the gain, the BLS said Tuesday. Recent data indicates that inflation persists about 1 percentage point above the Fed's 2% long-run target, Musalem said. 'It's going to take another two to three quarters for tariffs to play through' the data on price pressures, he said. 'I expect most of the impact to fade over time, but there is a reasonable probability that there may be some persistence, and we need to get a better fix on that understanding.' When determining monetary policy, central bankers will need to balance their need to both curb above-target inflation and head off a rise in unemployment, Musalem said. 'You have to balance the labor-market side and the inflation side of the mandate,' he said, adding that he has not decided whether the Fed should alter the main interest rate at its next policy meeting. Traders in interest rate futures believe the central bank will err on the side of averting labor market weakness. They set 93% odds on Thursday that policymakers will trim borrowing costs by a quarter percentage point at a Sept. 16-17 meeting, according to the CME FedWatch Tool. Atlanta Fed President Raphael Bostic said Wednesday that policymakers should take their time to assess fresh data before changing the federal funds rate. 'Some of the worst moments for Fed policy have been when the Fed has done something and then they changed their mind and went the other way, and then they changed their mind and went the other way, and then they changed their mind went the other way,' he said. 'We did that in the '70s,' Bostic said. 'Inflation didn't go away for a long time, it stayed with us and that volatility was actually troublesome for the public.' The health of the labor market — with the unemployment rate at an unusually low 4.2% — gives policymakers 'the luxury' to take the time needed to clarify the best path forward for monetary policy, Bostic said. 'You've got a labor market that is quite strong, and so our maximum employment mandate is not at risk in the same way that the inflation mandate is,' he said. 'I feel we have some space now.'
New Straits Times
3 days ago
- Business
- New Straits Times
Gold poised for weekly fall as bets fade for big Fed rate cut
NEW YORK: Gold was subdued on Friday and was heading for a weekly fall, as hotter than expected US inflation data dented expectations for a super sized 50 basis point US interest rate cut in September. Spot gold was down 0.1 per cent at US$3,333.58 per ounce, as of 0120 GMT. Bullion has fallen 1.9 per cent for the week. US gold futures for December delivery eased 0.1 per cent to US$3,378.90. The Labor Department reported the US producer price index (PPI) rose 3.3 per cent year-on-year in July, beating forecasts of 2.5 per cent while weekly jobless claims were lower than expected at 224,000 versus 228,000 forecast. This comes after data on Tuesday showed that US consumer prices increased marginally in July, increasing chances of a Federal Reserve rate cut next month. While Thursday's hot PPI data did not dent chances of a Fed rate cut in September, it hurt the case for the Fed to resume cutting rates with a 50 bp reduction. St. Louis Fed President Alberto Musalem on Thursday said a half-point rate cut at the Fed's September meeting is not warranted, a day after Treasury Secretary Scott Bessent said it was possible. Non-yielding gold thrives in a low-interest-rate environment. Investors will next focus on whether Fed Chair Jerome Powell offers any fresh clues on policy at the US central bank's annual economic policy symposium in Jackson Hole, Wyoming, next week. On the geopolitical front, investors are tempering expectations that Friday's summit between Donald Trump and Vladimir Putin will deliver a significant breakthrough on the war in Ukraine despite some hopeful sign. SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings fell 0.30 per cent to 961.35 metric tons on Thursday from 964.22 tons on Wednesday. Elsewhere, spot silver rose 0.2 per cent to US$37.89 per ounce, platinum fell 0.3 per cent to US$1,351.78 and palladium slipped 0.4 per cent to US$1,140.69.
Economic Times
3 days ago
- Business
- Economic Times
Gold poised for weekly fall as bets fade for big Fed rate cut
Gold was subdued on Friday and was heading for a weekly fall, as hotter-than-expected U.S. inflation data dented expectations for a super-sized 50 basis point U.S. interest rate cut in September. ADVERTISEMENT Spot gold was down 0.1% at $3,333.58 per ounce, as of 0120 GMT. Bullion has fallen 1.9% for the week. U.S. gold futures for December delivery eased 0.1% to $3,378.90. The Labor Department reported the U.S. producer price index (PPI) rose 3.3% year-on-year in July, beating forecasts of 2.5% while weekly jobless claims were lower than expected at 224,000 versus 228,000 forecast. This comes after data on Tuesday showed that U.S. consumer prices increased marginally in July, increasing chances of a Federal Reserve rate cut next month. While Thursday's hot PPI data did not dent chances of a Fed rate cut in September, it hurt the case for the Fed to resume cutting rates with a 50 bp reduction. St. Louis Fed President Alberto Musalem on Thursday said a half-point rate cut at the Fed's September meeting is not warranted, a day after Treasury Secretary Scott Bessent said it was possible. ADVERTISEMENT Non-yielding gold thrives in a low-interest-rate environment. Unlock 500+ Stock Recos on App Investors will next focus on whether Fed Chair Jerome Powell offers any fresh clues on policy at the U.S. central bank's annual economic policy symposium in Jackson Hole, Wyoming, next week. ADVERTISEMENT On the geopolitical front, investors are tempering expectations that Friday's summit between Donald Trump and Vladimir Putin will deliver a significant breakthrough on the war in Ukraine despite some hopeful sign. SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings fell 0.30% to 961.35 metric tons on Thursday from 964.22 tons on Wednesday. ADVERTISEMENT *Elsewhere, spot silver rose 0.2% to $37.89 per ounce, platinum fell 0.3% to $1,351.78 and palladium slipped 0.4% to $1,140.69. DATA/EVENTS (GMT) 0200 China Urban Investment (YTD)YY, Retail Sales YY July 0200 China Unemp Rate Urban Area July 1000 EU Reserve Assets Total July 1230 US Import Prices YY, Retail Sales MM July 1315 US Industrial Production MM July 1400 US U Mich Sentiment Prelim August (You can now subscribe to our ETMarkets WhatsApp channel)
Time of India
3 days ago
- Business
- Time of India
Gold poised for weekly fall as bets fade for big Fed rate cut
Gold was subdued on Friday and was heading for a weekly fall, as hotter-than-expected U.S. inflation data dented expectations for a super-sized 50 basis point U.S. interest rate cut in September. FUNDAMENTALS Spot gold was down 0.1% at $3,333.58 per ounce, as of 0120 GMT. Bullion has fallen 1.9% for the week. U.S. gold futures for December delivery eased 0.1% to $3,378.90. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Colombia: New Container Houses (Prices May Surprise You) Container House | Search ads Search Now Undo The Labor Department reported the U.S. producer price index (PPI) rose 3.3% year-on-year in July, beating forecasts of 2.5% while weekly jobless claims were lower than expected at 224,000 versus 228,000 forecast. This comes after data on Tuesday showed that U.S. consumer prices increased marginally in July, increasing chances of a Federal Reserve rate cut next month. While Thursday's hot PPI data did not dent chances of a Fed rate cut in September, it hurt the case for the Fed to resume cutting rates with a 50 bp reduction. Live Events St. Louis Fed President Alberto Musalem on Thursday said a half-point rate cut at the Fed's September meeting is not warranted, a day after Treasury Secretary Scott Bessent said it was possible. Non-yielding gold thrives in a low-interest-rate environment. Investors will next focus on whether Fed Chair Jerome Powell offers any fresh clues on policy at the U.S. central bank's annual economic policy symposium in Jackson Hole, Wyoming, next week. On the geopolitical front, investors are tempering expectations that Friday's summit between Donald Trump and Vladimir Putin will deliver a significant breakthrough on the war in Ukraine despite some hopeful sign. SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings fell 0.30% to 961.35 metric tons on Thursday from 964.22 tons on Wednesday. *Elsewhere, spot silver rose 0.2% to $37.89 per ounce, platinum fell 0.3% to $1,351.78 and palladium slipped 0.4% to $1,140.69. DATA/EVENTS (GMT) 0200 China Urban Investment (YTD)YY, Retail Sales YY July 0200 China Unemp Rate Urban Area July 1000 EU Reserve Assets Total July 1230 US Import Prices YY, Retail Sales MM July 1315 US Industrial Production MM July 1400 US U Mich Sentiment Prelim August
Business Recorder
3 days ago
- Business
- Business Recorder
Wall St slips as rate-cut bets waver on hot producer inflation data
NEW YORK: Wall Street's main indexes declined on Thursday, after a hotter-than-expected producer prices report dampened investor expectations of potential interest-rate cuts by the Federal Reserve this year. A Labor Department report showed producer prices increased by the most in three years in July due to a surge in the costs of goods and services, suggesting a broad pickup in inflation was imminent. Traders trimmed their Fed rate-cut expectations for the rest of the year to about 56.7 basis points, according to data compiled by LSEG, compared with around 63 bps before the report. But they are still fully pricing in a quarter-percentage-point cut in September. 'The implication is that the Fed is going to offer a 25-bit cut in September. But it will be a hawkish cut. It's way too early still for the Fed to wish to guide the market towards an extended easing cycle,' said Thierry Wizman, global FX and rates strategist at Macquarie Group. 'The next important thing will be the Expenditures Price Index later this month. If there are signals that there's inflation broadly in services, the market will take that adversely.' A separate report on Thursday showed the number of Americans filing new applications for jobless benefits fell last week. At 11:55 a.m. ET, the Dow Jones Industrial Average fell 163.83 points, or 0.36%, to 44,758.44, the S&P 500 lost 9.96 points, or 0.16%, to 6,456.62 and the Nasdaq Composite lost 26.59 points, or 0.12%, to 21,686.56. Recent data reflecting labor market weakness and a moderate rise in consumer prices had strengthened expectations that the central bank will potentially lower interest rates next month. However, Thursday's report fanned concerns that US tariffs on imports could start to impact prices in the coming months and dampen a rally in US stocks that had helped the benchmark S&P 500 and tech-heavy Nasdaq log record highs over the past two sessions. On Thursday, eight of the 11 S&P 500 sectors declined, with materials falling the most, down 1.3%. Rate-sensitive small-caps and housing stocks also dropped more than 1% each. Fed President Alberto Musalem, a voting member on the Federal Open Market Committee this year, said a half-point rate cut at the Fed's September meeting is not warranted, a day after Treasury Secretary Scott Bessent said it was possible. Cisco Systems lost 1.4% after the network equipment manufacturer's broadly in-line forecast did little to encourage investors. Declining issues outnumbered advancers by a 3.86-to-1 ratio on the NYSE and by a 3.14-to-1 ratio on the Nasdaq. The S&P 500 posted 12 new 52-week highs and one new low while the Nasdaq Composite recorded 57 new highs and 55 new lows.
