Latest news with #wholesale prices
Yahoo
4 days ago
- Business
- Yahoo
US wholesale prices see biggest surge in three years
US wholesale prices rose far more than expected in July, posting their biggest surge in three years, new data released Thursday showed. The producer price index jumped 0.9% from June, pushing the annual inflation rate to 3.3% — well above the 0.2% monthly rise economists had expected, with services being hardest hit. The report suggested that even though businesses have been absorbing most of the costs from US President Donald Trump's tariffs, they could pass the burden on to consumers in the coming months, 'with inflation likely to climb modestly in the second half of 2025,' one economist said. The new numbers are 'likely to unwind some of the optimism of a 'guaranteed' rate cut' by the US Federal Reserve next month, one investment executive told CNN. Trump has persistently pressured the central bank to cut rates. — Paige Bruton 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
Globe and Mail
4 days ago
- Business
- Globe and Mail
Fed expected to stick with regular-sized rate cut after hot inflation data
A jump in U.S. wholesale prices last month looks to have all but erased the possibility that the Federal Reserve will deliver a jumbo-sized half-percentage-point interest rate cut in September, though expectations for a quarter-percentage-point move next month, followed by another in October, remain intact. U.S. producer prices rose 0.9 per cent in July amid a surge in the costs of goods but also of services like machinery and equipment wholesaling, the Labor Department's Bureau of Labor Statistics said on Thursday. The increase, which far exceeded economists' expectations, may get passed on to consumers, who so far have not experienced a strong overall increase in prices even as the Trump administration has ratcheted up import tariffs. 'We expect a stronger pass-through of levies into consumer prices in coming months, with inflation likely to climb modestly over the second half of 2025,' said Ben Ayers, senior economist at Nationwide. The rise in services inflation will be particularly worrisome to Fed policymakers like Chicago Fed President Austan Goolsbee, who said on Wednesday he's on alert for signs that inflation is seeping into prices beyond those for goods affected directly by tariffs. An increase in services inflation, also evident in the consumer price data released on Tuesday, suggests inflation could become a more persistent problem, he said. U.S. Treasury Secretary Scott Bessent, who is leading the search for a replacement for Fed Chair Jerome Powell, has been pushing for a bigger rate cut next month, citing tame inflation, though on Thursday he said the U.S. central bank could start with a quarter-percentage-point move. Before the data, traders put about a 3 per cent probability on the idea of a half-percentage-point rate cut, with most bets firmly on a quarter-percentage-point reduction. After the data, traders erased bets on a 50-basis-point move. San Francisco Fed President Mary Daly, who signaled earlier this week that she is increasingly open to the idea of a rate cut given the softening in the labor market, told the Wall Street Journal in a story published on Thursday that a 50-basis-point rate cut would signal an urgency about the job market that she does not feel. 'It has been acting as a bucket of really cool water poured on the heads of those calling for 50 basis points in September,' Slawomir Soroczynski, head of fixed income at Crown Agents Investment Management, said after the data. Rate-sensitive two-year Treasury yields jumped more than five basis points after the data and were last at 3.722 per cent, over three basis points higher than on Wednesday. Benchmark 10-year yields were up about two basis points on the day, at 4.264 per cent. 'The large spike in the Producer Price Index this morning shows inflation is coursing through the economy, even if it hasn't been felt by consumers yet,' said Chris Zaccarelli, chief investment officer for Northlight Asset Management. 'Given how benign the CPI (consumer price index) numbers were on Tuesday, this is a most unwelcome surprise to the upside and is likely to unwind some of the optimism of a 'guaranteed' rate cut next month,' he said in a note. The Fed will get another round of inflation data and a fresh jobs report before its September 16-17 policy meeting. Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.
Khaleej Times
5 days ago
- Business
- Khaleej Times
Fed expected to stick with regular-sized rate cut after hot inflation data
A jump in U.S. wholesale prices last month looks to have all but erased the possibility that the Federal Reserve will deliver a jumbo-sized half-percentage-point interest rate cut in September, though expectations for a quarter-percentage-point move next month, followed by another in October, remain intact. U.S. producer prices rose 0.9% in July amid a surge in the costs of goods but also of services like machinery and equipment wholesaling, the Labor Department's Bureau of Labor Statistics said on Thursday. The increase, which far exceeded economists' expectations, may get passed on to consumers, who so far have not experienced a strong overall increase in prices even as the Trump administration has ratcheted up import tariffs. "We expect a stronger pass-through of levies into consumer prices in coming months, with inflation likely to climb modestly over the second half of 2025," said Ben Ayers, senior economist at Nationwide. The rise in services inflation will be particularly worrisome to Fed policymakers like Chicago Fed President Austan Goolsbee, who said on Wednesday he's on alert for signs that inflation is seeping into prices beyond those for goods affected directly by tariffs. An increase in services inflation, also evident in the consumer price data released on Tuesday, suggests inflation could become a more persistent problem, he said. U.S. Treasury Secretary Scott Bessent, who is leading the search for a replacement for Fed Chair Jerome Powell, has been pushing for a bigger rate cut next month, citing tame inflation, though on Thursday he said the U.S. central bank could start with a quarter-percentage-point move. Before the data, traders put about a 3% probability on the idea of a half-percentage-point rate cut, with most bets firmly on a quarter-percentage-point reduction. After the data, traders erased bets on a 50-basis-point move. San Francisco Fed President Mary Daly, who signaled earlier this week that she is increasingly open to the idea of a rate cut given the softening in the labor market, told the Wall Street Journal in a story published on Thursday that a 50-basis-point rate cut would signal an urgency about the job market that she does not feel. "It has been acting as a bucket of really cool water poured on the heads of those calling for 50 basis points in September," Slawomir Soroczynski, head of fixed income at Crown Agents Investment Management, said after the data. Rate-sensitive two-year Treasury yields jumped more than five basis points after the data and were last at 3.722%, over three basis points higher than on Wednesday. Benchmark 10-year yields were up about two basis points on the day, at 4.264%. "The large spike in the Producer Price Index this morning shows inflation is coursing through the economy, even if it hasn't been felt by consumers yet," said Chris Zaccarelli, chief investment officer for Northlight Asset Management. "Given how benign the CPI (consumer price index) numbers were on Tuesday, this is a most unwelcome surprise to the upside and is likely to unwind some of the optimism of a 'guaranteed' rate cut next month," he said in a note. The Fed will get another round of inflation data and a fresh jobs report before its September 16-17 policy meeting.
Forbes
5 days ago
- Business
- Forbes
Stocks Shudder As PPI Shows Higher Than Expected Wholesale Inflation
Wholesale prices increased by an unexpected 0.9% in July, the Bureau of Labor Statistics reported on Thursday, causing markets to shudder after reaching record highs on a much more optimistic inflation report from the consumer price index on Tuesday. Prices for wholesale goods and services increased in July, the Bureau of Labor Statistics said. Los Angeles Times via Getty Images The producer price index indicated wholesale prices rose 0.9% in July for an increase in 3.3% for the year, after remaining flat in June. The jump in final demand caught economists polled by Reuters by surprise, who expected it to rise a more modest 0.2%. Price increases for services drove the rise, the BLS said, with final demand rising 1.1%—its largest increase since March 2022. Prices for goods also increased, which the BLS attributed in large part to prices for food rising 1.4%. Both the S&P 500 and Nasdaq slipped after the news broke on Thursday morning, but largely recovered and remained flat by 10:40 a.m. This is a breaking story and will be updated.
Reuters
5 days ago
- Business
- Reuters
Fed expected to stick with regular-sized rate cut after hot inflation data
Aug 14 (Reuters) - A jump in U.S. wholesale prices last month looks to have all but erased the possibility that the Federal Reserve will deliver a jumbo-sized half-percentage-point interest rate cut in September, though expectations for a quarter-percentage-point move next month, followed by another in October, remain intact. U.S. producer prices rose 0.9% in July amid a surge in the costs of goods but also of services like machinery and equipment wholesaling, the Labor Department's Bureau of Labor Statistics said on Thursday. The increase, which far exceeded economists' expectations, may get passed on to consumers, who so far have not experienced a strong overall increase in prices even as the Trump administration has ratcheted up import tariffs. "We expect a stronger pass-through of levies into consumer prices in coming months, with inflation likely to climb modestly over the second half of 2025," said Ben Ayers, senior economist at Nationwide. The rise in services inflation will be particularly worrisome to Fed policymakers like Chicago Fed President Austan Goolsbee, who said on Wednesday he's on alert for signs that inflation is seeping into prices beyond those for goods affected directly by tariffs. An increase in services inflation, also evident in the consumer price data released on Tuesday, suggests inflation could become a more persistent problem, he said. U.S. Treasury Secretary Scott Bessent, who is leading the search for a replacement for Fed Chair Jerome Powell, has been pushing for a bigger rate cut next month, citing tame inflation, though on Thursday he said the U.S. central bank could start with a quarter-percentage-point move. Before the data, traders put about a 3% probability on the idea of a half-percentage-point rate cut, with most bets firmly on a quarter-percentage-point reduction. After the data, traders erased bets on a 50-basis-point move. San Francisco Fed President Mary Daly, who signaled earlier this week that she is increasingly open to the idea of a rate cut given the softening in the labor market, told the Wall Street Journal in a story published on Thursday that a 50-basis-point rate cut would signal an urgency about the job market that she does not feel. "It has been acting as a bucket of really cool water poured on the heads of those calling for 50 basis points in September," Slawomir Soroczynski, head of fixed income at Crown Agents Investment Management, said after the data. Rate-sensitive two-year Treasury yields jumped more than five basis points after the data and were last at 3.722%, over three basis points higher than on Wednesday. Benchmark 10-year yields were up about two basis points on the day, at 4.264%. "The large spike in the Producer Price Index this morning shows inflation is coursing through the economy, even if it hasn't been felt by consumers yet," said Chris Zaccarelli, chief investment officer for Northlight Asset Management. "Given how benign the CPI (consumer price index) numbers were on Tuesday, this is a most unwelcome surprise to the upside and is likely to unwind some of the optimism of a 'guaranteed' rate cut next month," he said in a note. The Fed will get another round of inflation data and a fresh jobs report before its September 16-17 policy meeting.
