Latest news with #JenniferSchonberger
Yahoo
4 days ago
- Business
- Yahoo
PPI comes in hot: When will wholesale inflation hit consumers?
Markets are digesting hotter-than-expected Producer Price Index (PPI) inflation data, with rising services costs raising new concerns for the Federal Reserve. Yahoo Finance Senior Reporters Jennifer Schonberger joins Morning Brief with Julie Hyman to break down how the new data could influence interest rate cut expectations heading into the Fed's September meeting. To watch more expert insights and analysis on the latest market action, check out more Morning Brief. Jen, I want to start with you and that wholesale inflation data, which is a bit of a shocker. Yeah, it was definitely much hotter than expected by a long shot, right? Look at those numbers. Month over month, nine tenths of a percent versus two tenths of a percent that was expected. So prices certainly heating up for businesses. The question now is at what point does this translate over into CPI, right? Will businesses be pushing those cost increases onto consumers at some point? Um I'm also looking at, we we know that the Fed looks at the personal consumption expenditures index. And today's report PPI in conjunction with CPI that we got earlier uh this week are data from both reports are taken together for that PCE number, which we will get at the end of the month. Uh on its face, I would expect PCE to warm up based on uh the PPI data that we got this morning. I just got a note from Capital Economics. Um they are estimating the three month annualized rate would jump back up to 3.2% from 2.7 on core PCE. That certainly would be moving the Fed in the wrong direction. As for what this means for the Fed, I think it continues to put them in a conundrum between a rock and a hard place, where both sides of their dual mandate are seemingly coming into conflict, right? The hawks have been saying, we need to wait and see whether tariffs create inflation that's going to be passed on to consumers. Today's report is, as far as businesses are concerned, looks like we're starting to see the width of that. The question is, does that get passed on? Right? The president has said no, foreign governments, businesses are paying for this. Goldman Sachs has said businesses are paying for 64% of this right now, but it's gonna get passed on to consumers. So maybe this keeps many of those folks who are in that wait and see posture, continuing in that posture. And then on the other side, right, we had that weaker than expected jobs report, and we have folks like San Francisco, um Mary Daly coming out and saying, I'm worried about the trajectory of the job market more than inflation. So I don't think that this report solves anything this morning.
Yahoo
4 days ago
- Business
- Yahoo
Markets still expect Sept. Fed rate cut, despite hot PPI data
Even hotter-than-expected inflation data isn't rattling the market's expectation of an interest rate cut from the Federal Reserve in September. Yahoo Finance Senior Reporters Jennifer Schonberger and Allie Canal outline the latest. To watch more expert insights and analysis on the latest market action, check out more Morning Brief. What's also interesting, Jen, is we're not seeing, uh, at least fed funds futures budge that much this morning. That is not the sum total of of inflation expect of, uh, interest rate expectations, but it is a snapshot. Yeah, it is interesting that we're holding at 90% plus and above. Um, but again, I think it's almost like the market's trying to force the Fed's hand, and we do know there's volatility in these reports. So we'll have to see. We're going to get another CPI. We're going to get another PPI before September. But I think also, I'm reading this morning that you didn't just see the good side of PPI pop up, you saw the services side as well. And, uh, we heard from Chicago Fed President Austin Goolsbee yesterday, and when he talked about the CPI number, he said what concerned him about that was that services increased. So if we are seeing inflation increase, not just on the goods side, but on the services side, that's going to be concerning for the Fed. They're going to need to see more reports, right, before they make any determination on that. But if it's clear that inflation is not staying in the goods lane, and it's spilling over to services, which is what the Fed was concerned about before, we saw inflation coming down before this recent rout popping back up, then that's something to look for. Um, and Ali, you know, of course, it's not just fed funds futures. We can look across the spectrum, and we definitely saw stocks react negatively to this. Yeah, stock futures falling across the board here. And it is interesting to see those fed fund futures, uh, still hovering around that 95% when it comes to expectations for rate cuts in September, cuz normally that's correlated to what we see in the stock market. I'm looking at bond yields right now, too. And the 10-year yield is still low, hovering around 4.2%. So we're not seeing this, uh, massive recalibration of rate cut expectations, but we do have a wide range of dispersion when it comes to what Wall Street thinks is going to happen, when it comes to what actual FOMC officials think could happen. And that's because, as Jed was Jen was alluding to, the Fed is really caught between its two dual mandates. And even though we did have a better than feared CPI print, let's not forget that core services did firm up. And that's what I've been hearing from my sources is the fact that we have services inflation that's now firmer. That can offset any increases we see on the good side due to tariffs. And like you were saying, Julie, we have heard from businesses throughout this earning season that they're absorbing a lot of these costs. But from the early commentary on Wall Street, that's only going to last so long, and eventually that has to get passed on to the consumer price index and to, uh, our actual wallets. So that's something to look out for in the fall, and even into 2026, because that's what economists have been telling us. We're not going to see this tariff pass through right away. It's going to take a longer time. And I think markets got a little too excited after that CPI report the other day that maybe we won't see that impact fully materialize. I just, I just think from this hotter PPI print that might not be a reality.
Yahoo
5 days ago
- Business
- Yahoo
Fed's Bostic, Goolsbee comment on Sept. rate cuts: What to know
Markets are pricing in nearly a 99% chance of an interest rate cut from the Federal Reserve in September. Meanwhile, Chicago Fed President Austan Goolsbee discussed on Wednesday the possibility of September rate cuts, highlighting his concerns about whether the impact of tariffs will be more inflationary and persistent than anticipated. Additionally, Atlanta Fed President Raphael Bostic spoke on the possibility and emphasized that a healthy labor market would still give the Fed room to wait and see before cutting rates. Yahoo Finance Senior Reporter Jennifer Schonberger joins Market Domination with Josh Lipton to discuss the details. To watch more expert insights and analysis on the latest market action, check out more Market Domination. And Jen, we're getting new info as well from Fed Presidents Goolsbee and Bostic. What is the latest there? Yeah. So while the market is pricing in virtually a 99% chance of a rate cut in September, uh, we heard from Chicago Fed President Austin Goolsbee and Atlanta Fed president Rafael Bostic, who are very much in a wait and see mode for the next five weeks before the Fed's meeting on September 17th. Uh, Goolsbee in particular seems to be eyeing inflation. He's concerned about the prospect of the impact of tariffs on inflation being more persistent, pointing to 50% tariffs on steel, for instance, and what impact that could have on intermediate goods acting as a tax on manufacturers. He pointed to the recent CPI report saying, if we get more reports like that where we see the services side of inflation stickier and popping up, that would be a concern. Meanwhile, Bostic, who has been quite hawkish and felt that with the labor market in a healthy position giving the Fed room to wait and see, is now looking at the job market given that weaker than expected jobs report for the month of July, saying that it's the Fed's task over the next five weeks to see if the labor market is indeed signaling more weakness than previously thought. All right, thank you, Jen. Related Videos Rigetti CEO explains 'dual advantage' of quantum computing Cisco posts slight Q4 earnings beat Bullish & other crypto names see 'tons' of demand from equity Bullish soars in public debut, Amazon delivery, downgraded 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
Yahoo
6 days ago
- Business
- Yahoo
What July CPI data means for the Fed & what's next for BLS
After July's Consumer Price Index (CPI) showed prices rose as expected, Yahoo Finance Senior Federal Reserve Reporter Jennifer Schonberger examines what the fresh data means for the Federal Reserve. The Morning Brief team also discusses Trump's nominee for the Bureau of Labor Statistics (BLS) commissioner, EJ Antoni. To watch more expert insights and analysis on the latest market action, check out more Morning Brief. I'm curious what stood out for to you and sort of the implications then for the Federal Reserve? Yeah, Julie, I mean, clearly markets think that a rate cut in September is a slam dunk, but you look at this morning's report and I'm not sure that's the case because core CPI, which is what the Fed focuses on, clocked in hotter than expected, 3.1% versus 3%. Remember this excludes the volatile food and energy prices. That was up from 2.9% in June. And what the Fed's really looking for is the impact of tariffs. And when I looked at this report, you see a little bit of it, right, when you look at furniture, um, maybe shoes, not so much in apparel, which is surprising to me. And so it's not super perceptible when you look at this report, but services looked sticky to me and services has been a concern for the Fed. It looked like it was coming in line, it was it was looking good. So this report looks a little bit sticky to me. I don't think it's enough for the Fed to make a decision at this point. We are going to get more data before the September meeting, but it goes back to what I've said previously on our air and I'll say it again, which is that the Fed is in a bit of a dilemma right now. They're looking at both the inflation side of their mandate, which looks sticky. They're looking at the job side of their mandate, which is looking weaker. I think that the determinant factor for the Fed is going to be the September jobs report, the one that we get, or I should say the August jobs report that comes out on September 5th. Because if that is weaker, then I think that could be the trigger for the Fed to cut. But if we see a rebound from what we saw this summer, given that inflation looks sticky right now, I still see a majority of the committee and sort of that wait and see mode. Well, and I'm going to I'm going to throw a further wrench into it. What if you see a rebound but a lower revision for July, right? Because so so then do you just assume that that August number is going to be revised lower as well. So just to Right, and that also speaks to how the data is collected, right? We know that there's sort of a three-month course here where the BLS goes out to companies and maybe companies aren't responding until month three and that's why we're seeing such large revisions in the data. And to your point, you know, that's what we've seen consistently all year. So we'll probably see another revision down. Yeah. I mean, could we go negative? Right. As as Claudia Sam said, uh, you know, in the in the last half hour, Fed's job is never easy, right? So, but maybe particularly not right now. Um, Jen, I also want to talk to you about this new nominee for commissioner of the Bureau of Labor Statistics, EJ Antony, who is at the Conservative Heritage Foundation. Economists don't seem thrilled about this pick and there is this fear amongst economists that there will be sort of the partisan thumb on the scale when it comes to data. Well, remember, Julie, like I said, I was watching whether the nominee is someone who is going to change the process of how data is collected and how things are done versus just simply putting somebody new into oversee as we saw with McIntyre prior. And and with this new nominee, Antony, you know, he has been a long time critic of the BLS and how the BLS collects data and he said there are better ways to collect data and process and disseminate it and that is going to be the next job of the BLS commissioner. So now that he is the nominee, you know, we're going to have to see what he's going to do. Now, he has to be confirmed by the Senate. So the Senate is going to be peppering him with questions. I'm sure Democrats more than Republicans about what he's going to do, how he could change the process of data collection. Certainly there are improvements that could be made, but the question is, you know, could this be uh uh slanted in a way that would be partisan to make the numbers look better, which is what investors have been concerned about. And questions over how could he handle a report that perhaps the president doesn't like. Right. Good questions all. Romson, I know you've been looking at some of um Antony's past commentary. Um we were talking about this a little bit in the last hour that he's been a critic, but it's not clear how he would fix it, right? Or how he would change it at this point. That's right. I mean, it's clear he's a Trump ally. Um, you don't have to be a genius to work that out. He has called the data from the BLS back in May. He tweeted and said on on X, he wrote, you know, it's like getting a random num a random number generator. He's called the CPI data under Biden phony baloney. So he's clearly um, you know, agrees with President Trump on a lot of things. Um, and that's what the worry is, that he he the Senate might he might he does need Senate approval and his critics are worried though that he's not going to be uh neutral enough. And don't forget, non-farm payroll data is often revised. And in fact, in the run-up to the November 2024 elections, the big revisions, some economists and statisticians would tell you, they hurt Trump's opponents more than they hurt President Trump. Uh, so he's, yeah, it's a it's a it's a really tricky one. I he's definitely going to get grilled by Democrats, but I you know, don't don't rule out any Republicans also asking him some tough questions as well. Don't forget the start, the number of staff he's going to be in charge of is just 2,000. It's not a lot. And you know, we're in a period where, you know, President Trump is trying to to cut jobs in big agencies. So this is going to be a tricky job, whoever took the job, but he's going to come under increased scrutiny as he's seen as sort of a a big Trump ally as well. Right. And and economists have been calling for more resources at that agency, not less. Related Videos There is 'good doubt' about Trump's BLS head nominee EJ Antoni Inflation report, BLS pick, China trade extension: 3 Things Why there's a 'disconnect' between the Fed & markets right now HSBC's Rasco on Factors Behind the Stocks Rally 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
Yahoo
11-08-2025
- Business
- Yahoo
Market rebound, key CPI report: A look at this week's catalysts
Stocks are coming off their best week since June, driven by strong tech earnings and hopes of a Russia–Ukraine truce. Yahoo Finance Senior Reporters Brooke DiPalma and Jennifer Schonberger break down what's ahead, including a key Consumer Price Index (CPI) report and the Federal Reserve's next move. To watch more expert insights and analysis on the latest market action, check out more Morning Brief. The AI trade has really been powering stocks higher, Brooke, and that means that the Nasdaq closed at a record on Friday. The S&P almost got there. The Dow is still a little bit below those levels. Yeah, the momentum is expected to continue into this week. Stock futures indicate that we will see green in the early hours of trading this morning. It's three key things really drove that rebound that we saw last week, making it the best week that the US markets have seen since June, and that was largely because this rebound for weaker-than-expected jobs data from that revision of both June and May, as well as that surge in tech stocks as second-quarter earnings have really been led by big tech, and also, investors keeping a close eye on a potential truce between Russia and Ukraine, as President Trump is expected to meet with Vladimir Putin this Friday in Alaska. And what we're seeing here is that strategists indicate that there's still more room to run in this market. Citi strategists indicate that they do, or rather, they raised their target for the S&P 500. They do expect that tax cuts will offset all this negative impact that we're seeing from President Trump's tariffs, and they expect the S&P 500 to now hit 6,600 points. That's up from 6,300, but that would indicate that we need to see a 3% gain from Friday's market close until year end in order to hit this new found target from Citibank. Right now, futures indicating right now, S&P 500 sitting around 6,389. And so, that would obviously mean about a 200 plus point gain for now until year end. But right now, we're seeing lots of momentum in this market, AI really leading the trade here once again. Yeah, and obviously, it makes sense that they're upgrading their target since the S&P was already above their target, unless they believed that we would just tread water for the rest of the year, which does not seem to be the consensus view. In terms of the catalysts this week, the most important of them, Jen, is probably going to be that CPI report. Yeah, Julie, we're closely watching CPI, specifically core CPI, which strips out those volatile food and energy prices, and economists are expecting that to tick up to 3% for the month of July. That would be up from 2.9 from the month before that in June. And I'm watching to see whether we see goods inflation sort of pushing up that number again. Remember, Fed officials are closely watching for the impact of tariffs on inflation, and Fed Chair, Jay Powell, specifically, has said he wants to see the summer months, June, July, and August. So, we saw a little bit of an uptick in June. Here we are coming to July. We're expecting to see further uptick there. Uh, what's interesting to me, though, is that CPI tends to run a little bit hotter than PCE, the personal consumption expenditures index, which is the Fed's preferred inflation gauge. And Fed officials now see inflation topping out at 3.1% for the year based on PCE. So, it seems, and then coming back down for 2026. So, it seems like they are coming around to the idea that we're going to see a one-time increase in inflation as a result of tariffs. So, many still in that sort of wait-and-see posture to see if it will be more persistent. And we're going to hear from some Fed speakers, specifically, some hawks this week, and I'm curious to see how they interpret the new inflation data that we will get tomorrow, along with the jobs data, that weaker jobs data that we got a couple weeks ago. And, um, we should also note that the CPI data comes from the BLS, which is the same agency that puts out the labor numbers, right? And this is as the administration is reportedly considering candidates to lead that agency as well. Yeah, absolutely, Julie. That's another storyline that we are going to be watching as well, and we're watching to see who the president is going to put in place as the BLS commissioner. Uh, I want to note, though, on on that story, that the BLS commissioner does not have a hand in actually surveying the data. So, I'm not sure how that role may change with the new appointment or not, uh, but I think investors are going to be looking at those numbers, thinking about that in the back of their mind, for sure, as we receive that data tomorrow. And you know, might it's not not unusual for us to get some kind of social media post from the president when we get those numbers, whatever that's going to look like.
