Latest news with #JacksonHoleEconomicSymposium
Nikkei Asia
2 days ago
- Business
- Nikkei Asia
Dollar higher as US producer prices surge in July
NEW YORK (Reuters) -- The U.S. dollar snapped a two-day losing streak on Thursday as data showed U.S. producer prices increased more than expected in July amid a surge in the costs of services and goods, suggesting a broader pickup in inflation in the months ahead. The hot measure of inflation at the wholesale level follows the release on Tuesday of a better-than-feared rise in consumer prices in July, which emboldened traders to boost bets on interest rate cuts from the Federal Reserve in coming months. While Thursday's data did not upset the case for a September rate cut it did raise worries that tariffs could still stir up inflation in coming months and change the course of interest rate cuts for the rest of the year. It also hurt the case for the Fed to resume cutting rates with a 50 basis point cut in September, something Treasury Secretary Scott Bessent suggested in an interview on Wednesday. "I think that was never particularly likely, but presumably this PPI report quashes that," Matt Weller, global head of market research at StoneX. More importantly the inflation data raises questions about whether the Fed can deliver an aggressive pace of cuts for the rest of the year, he said. "Some people were saying that we could see three consecutive 25 basis point rate cuts ... but if anything approaching this level of inflation is in place it seems like we might be looking at more of a max of two interest rate cuts and even that might be questionable," Weller said. While financial markets have priced in an interest rate cut from the Federal Reserve next month, rising services inflation and the expectation tariffs could still significantly boost goods prices left some economists doubtful of an aggressive resumption in policy easing in the absence of further labor market deterioration. Traders still see a Fed rate cut on Sept. 17 as a near certainty, according to LSEG data. The dollar index, measuring the currency against a basket of peers, was 0.5% higher at 98.17. The euro was 0.5% weaker at $1.16485 while the British pound eased 0.3% to $1.3538. Still, analysts warned against expecting a sustained rebound in the buck. "The market is very much likely to remain 'all in' on the idea of a September cut, at least until we hear from Powell at Jackson Hole next week," Michael Brown, market analyst at online broker Pepperstone in London, said, referring to the Fed's Jackson Hole Economic Symposium later this month. The yen rose against the dollar earlier in the session after Bessent suggested the Bank of Japan needs to raise rates again soon, before ceding ground to trade about flat on the day at 147.385 yen to a dollar. The stronger greenback weighed on the Australian dollar even as upbeat jobs data calmed concerns about a downturn in the labour market and lessened the need for another rate cut in the very near term. The Aussie was last down 0.8% to $0.6493. Meanwhile, bitcoin earlier hit its first record peak since July 14, pushing as high as $124,480.82 before trimming gains and was last down nearly 4% at around $118,536. Bitcoin was already underpinned by increased institutional money flows this year in the wake of a spate of regulatory changes spearheaded by Trump, who has billed himself the "cryptocurrency president." In the latest move, an executive order last week paved the way to allow crypto assets in 401(k) retirement accounts. "Corporate treasuries like MicroStrategy and Block Inc. continue to buy bitcoin," said IG analyst Tony Sycamore.
Reuters
2 days ago
- Business
- Reuters
Dollar higher as U.S. producer prices surge in July
NEW YORK, Aug 14 (Reuters) - The U.S. dollar snapped a two-day losing streak on Thursday as data showed U.S. producer prices increased more than expected in July amid a surge in the costs of services and goods, suggesting a broader pickup in inflation in the months ahead. The hot measure of inflation at the wholesale level follows the release on Tuesday of a better than feared rise in consumer prices in July, which emboldened traders to boost bets on interest rate cuts from the Federal Reserve in coming months. While Thursday's data did not upset the case for a September rate cut it did raise worries that tariffs could still stir up inflation in coming months and change the course of interest rate cuts for the rest of the year. It also hurt the case for the Fed to resume cutting rates with a 50 basis point cut in September, something Treasury Secretary Scott Bessent suggested in an interview on Wednesday. "I think that was never particularly likely, but presumably this PPI report quashes that," Matt Weller, global head of market research at StoneX. More importantly the inflation data raises questions about whether the Fed can deliver an aggressive pace of cuts for the rest of the year, he said. "Some people were saying that we could see three consecutive 25 basis point rate cuts ... but if anything approaching this level of inflation is in place it seems like we might be looking at more of a max of two interest rate cuts and even that might be questionable," Weller said. While financial markets have priced in an interest rate cut from the Federal Reserve next month, rising services inflation and the expectation tariffs could still significantly boost goods prices left some economists doubtful of an aggressive resumption in policy easing in the absence of further labor market deterioration. Traders still see a Fed rate cut on September 17 as a near certainty, according to LSEG data. The dollar index , measuring the currency against a basket of peers, was 0.5% higher at 98.17. The euro was 0.5% weaker at $1.16485 while the British pound eased 0.3% to $1.3538. Still, analysts warned against expecting a sustained rebound in the buck. "The market is very much likely to remain 'all in' on the idea of a September cut, at least until we hear from Powell at Jackson Hole next week," Michael Brown, market analyst at online broker Pepperstone in London, said, referring to the Fed's Jackson Hole Economic Symposium later this month. The yen rose against the dollar earlier in the session after Bessent suggested the Bank of Japan needs to raise rates again soon, before ceding ground to trade about flat on the day at 147.385 yen to a dollar. The stronger greenback weighed on the Australian dollar even as upbeat jobs data calmed concerns about a downturn in the labour market and lessened the need for another rate cut in the very near term. The Aussie was last down 0.8% to $0.6493. . Meanwhile, bitcoin earlier hit its first record peak since July 14, pushing as high as $124,480.82 before trimming gains and was last down nearly 4% at around $118,536. Bitcoin was already underpinned by increased institutional money flows this year in the wake of a spate of regulatory changes spearheaded by Trump, who has billed himself the "cryptocurrency president." In the latest move, an executive order last week paved the way to allow crypto assets in 401(k) retirement accounts. "Corporate treasuries like MicroStrategy and Block Inc. continue to buy bitcoin," said IG analyst Tony Sycamore.
Yahoo
2 days ago
- Business
- Yahoo
Inflation shock: Producer prices rise more than forecast as core inflation hits 3-year high in July
Producer prices in July rose faster than forecast across the board, giving investors and the Federal Reserve an inflation surprise just over a week out from Fed Chair Jay Powell's crucial Jackson Hole speech. The Producer Price Index for July showed inflation for businesses rose 0.9% over the prior month in July, well ahead of the 0.9% increase that was forecast data from the BLS showed Thursday. On an annual, prices rose 3.3%, the most since February. "Core" producer prices, which exclude food, energy, and trade services, rose 0.6% last month, the most since March 2022 and an uptick after prices were unchanged in June. On an annual basis, core producer prices rose 3.3%, which was also the most since February. Thursday's data comes two days after the July Consumer Price Index showed inflation pressures were broadly in-line with forecasts, while "core" inflation last month reached a six-month high. On an annual basis, consumer prices rose 3.1% in July, an increase from 2.9% the prior month and still well ahead of the Fed's 2% inflation target. Recent labor market data, as well as a growing number of Fed officials arguing for the merits of a rate cut, has seen markets price in a near-certainty that the central bank will begin cutting rates next month. On Aug. 22, Powell is expected to speak at the Jackson Hole Economic Symposium, where the Fed chair will likely outline his case for the central bank to begin a rate-cutting cycle this fall. This is breaking news. More to come. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Business Recorder
4 days ago
- Business
- Business Recorder
Dollar eases against euro
NEW YORK: The dollar eased against the euro on Tuesday after US consumer prices increased moderately in July, leaving intact the case for a Federal Reserve interest-rate cut next month. The consumer price index rose 0.2% last month after gaining 0.3% in June, the Labor Department's Bureau of Labor Statistics said on Tuesday. In the 12 months through July, the CPI advanced 2.7% after rising 2.7% in June. Economists polled by Reuters had forecast the CPI rising 0.2% and increasing 2.8% year-on-year. 'Underlying inflation remains subdued, giving policymakers room for maneuver as they respond to signs of incipient weakness in labor markets,' Karl Schamotta, chief market strategist at Corpay, said. 'Chair Powell should put a September cut on the table when he speaks at Jackson Hole on the 21st,' Schamotta said, referring to the Fed's Jackson Hole Economic Symposium later this month. Currency markets had been in a holding pattern earlier as expectation grew that a moderate reading on US price pressures could cement bets for a Fed rate reduction next month, which increased after last week's soft payrolls data. The euro erased earlier losses against the buck to trade up 0.06% at $1.16235. The greenback pared gains against the yen to trade 0.17% higher at 148.390 yen. 'Yield differentials are narrowing against the dollar across the policy-sensitive end of the curve, and the greenback is coming under sustained selling pressure against its advanced-economy rivals,' Schamotta said. 'This could persist through the end of the summer if incoming data releases confirm a deceleration in the US economy,' he said. Still, with the jury still out on the impact of tariffs on global growth, predicting how the dollar will react through the end of the year remained challenging, Schamotta said. On Tuesday, speculation about a change of leadership at the Fed was back as Former St. Louis Federal Reserve Bank President James Bullard said he would accept the role of Fed Chair if it was offered to him. Bullard told CNBC that he would accept the job 'if we can protect the value of the dollar ... that'll give us lower interest rates over time; if we aim for low and stable inflation, (and) respect the independence of the institution under the Federal Reserve Act'. Meanwhile, Sterling was up 0.4% on the dollar at $1.34805 after data that showed Britain's jobs market weakened further, albeit more slowly, while wage growth stayed strong - the latter underscoring why the Bank of England is so cautious about cutting interest rates. The numbers ought not to cause the Bank of England to accelerate the speed of its rate cuts. The BoE cut rates only last week in a tight 5-4 vote. The Australian dollar fetched $0.64945, down 0.3%, after the Reserve Bank of Australia's widely-expected decision to cut rates by a quarter point. The central bank cited a slowdown in inflation and a looser labor market, though it was cautious on prospects for further easing. Currency markets largely ignored Trump's decision to extend a pause in sharply higher tariffs on Chinese imports for another 90 days, as widely expected. Cryptocurrency bitcoin was about flat around $119,395, after climbing as high as $122,308.25 on Monday, taking it close to the all-time peak of $123,153.22 from mid-July.
Yahoo
4 days ago
- Business
- Yahoo
Why a Fed rate cut could lead to bad news for Big Tech stocks
Investors are looking for an interest rate cut — but the market may not respond as expected when it comes. "I think that the market's going to have to come to grips with the Fed is going to cut rates, and is it going to be the right move for the Fed to make now?" Jim Bianco of Bianco Research said on Opening Bid. July's Consumer Price Index (CPI) report showed core inflation rose 0.3%, the largest increase in six months. "Last year they cut rates, and the market decided it wasn't the right move," Bianco added. "And it shot yields on the 10 [year Treasury] and the 30-year up over 100 basis points." Bianco said the real inflationary pressure is building due to Trump's tariffs, and the impact could be significant. While some of the costs may be eaten by exporters or corporations, others will be passed on via price hikes. "There's about an extra $250 to $300 billion of tariffs that are going to be collected over the next year ... tariffs were running around $8 billion a month. Now they're running nearly $30 billion a month," he noted. Bianco expects Fed Chair Jerome Powell to provide some clarity at the Fed's annual Jackson Hole Economic Symposium later this month. And if Powell signals a September cut isn't coming, the backlash could be intense — including renewed political pressure from President Trump, who has previously floated the idea of firing the Fed chair. "If he says he's not going to cut rates, I would then put Trump firing him back into the play," Bianco said. The Fed's decision could also have an outsized impact on megacap tech stocks. The largest 10% of US companies now account for 76% of total market capitalization, the highest concentration on record, according to market data platform Barchart. The concentration makes the entire market vulnerable to shifts in interest rates. As yields go higher, money could move out of stocks and into bonds. Bianco warned that if 10-year Treasury yields hit 5%, it could trigger profit-taking in Big Tech stocks. Bianco advised investors to stay cautious when chasing the market's most popular names. "If you want to play some of these Mag 7s, you have to be prepared for big gains and big losses," he said. "Some think it's all a one-way street ... until it isn't." Francisco Velasquez is a Reporter at Yahoo Finance. He can be reached on LinkedIn and X, or via email at Click here for in-depth analysis of the latest stock market news and events moving stock prices Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
