Now Reading: Dollar mixed after flat US producer prices, rate hike bets cool
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Dollar mixed after flat US producer prices, rate hike bets cool
US producer prices were unchanged in July, leading traders to reduce bets on a September Federal Reserve interest rate hike. The flat reading in the Producer Price Index followed a revised 0.1%…
The Story in Brief
US producer prices were unchanged in July, leading traders to reduce bets on a September Federal Reserve interest rate hike. The flat reading in the Producer Price Index followed a revised 0.1% drop in June and missed economists' forecast of a 0.2% rebound, livemint.com reports. Fed funds futures now show a 35% probability of a September hike, down from 40% on Wednesday and 55% a week earlier. The dollar index edged up 0.02% to 99.96 after briefly falling. The yen weakened slightly, while the pound fell after UK growth data. Retail sales data on Friday will be the next test.
The Indian Opinion
The flat PPI data has cooled rate hike expectations, but the narrative that the Fed is done tightening may be premature. Inflation remains above 2%, oil supply risks persist, and the labour market is still stable despite July's job losses. The 35% probability of a September hike is not negligible. The real test will be Friday's retail sales and the PCE data later this month. If consumer spending stays strong, the rate hike talk will return.
Source: livemint.com
This story was synthesised by AI from the source linked above.
