Daily News 19

Tag: Jackson Hole Symposium

  • PPI Data Shows Wholesale Prices Rose as Expected

    PPI Data Shows Wholesale Prices Rose as Expected

    Wholesale Inflation Rises as Expected in August, Producer Prices Climb 0.4%

    U.S. wholesale inflation advanced largely in line with forecasts in August, according to data released Wednesday by the Bureau of Labor Statistics. The report arrives days before the closely watched Consumer Price Index release and as traders weigh the likelihood of another Federal Reserve rate hike this year.

    Monthly Producer Price Gains Accelerate

    The headline Producer Price Index (PPI) increased 0.4% in August from the previous month, matching economists’ consensus estimates. The reading marks a notable pickup from July’s revised gain of 0.1%.

    The “core” reading — which excludes the more volatile food and energy costs — showed producer prices advanced by 0.2% over the previous month. That came in slightly below the 0.3% growth economists had predicted and below July’s revised gain of 0.3%.

    Year-Over-Year Inflation Remains Elevated

    On an annual basis, headline producer prices rose 5.4% in August, slightly above the 5.3% estimate and accelerating from the previous month’s revised 4.8% print. Core inflation came in at 4.6%, in line with estimates but above July’s 4.2% increase.

    CPI Report Next in Focus for Fed Clues

    Today’s wholesale inflation data precedes the monthly Consumer Price Index report due Friday. Market participants will scrutinize the CPI for signals on the Federal Reserve’s policy trajectory.

    Economists expect the upcoming CPI data to show that headline consumer prices ticked up month over month but remained flat from a year ago at 3.4%. The “core” CPI — the more closely watched metric — is projected to tick down slightly on a yearly basis to 2.4%.

    Rate-Hike Bets Firm After Hawkish Jackson Hole Remarks

    Following Fed Chairman Kevin Warsh’s speech last month at the Jackson Hole symposium, where he took a more hawkish stance than expected, market positioning has shifted further toward a 25 basis point rate hike by year-end.

    Traders are currently pricing in roughly a 64% chance of a hike at the September meeting next week, while bets for at least one increase by the Fed’s December meeting sit at approximately 90%.

    Jake Conley is a breaking news reporter covering U.S. equities for Yahoo Finance. Follow him on X at @byjakeconley or email him at [email protected].

  • Will the Fed Raise Interest Rates in September? Latest Probability Figures Revealed

    Will the Fed Raise Interest Rates in September? Latest Probability Figures Revealed

    Expectations that the Federal Reserve could raise interest rates at its September meeting have increased sharply after cautious comments on inflation from Fed Chairman Kevin Warsh. The probability of a rate hike in forecasting markets has reached one of its highest levels in recent months, while U.S. Treasury yields have also risen significantly.

    Rate hike expectations shift ahead of September Fed meeting

    Market expectations are changing rapidly ahead of the Federal Reserve’s monetary policy meeting on September 16. Data from forecasting markets indicate that the probability of the Fed keeping interest rates unchanged is about 55%, while a 25-basis-point rate hike is priced at approximately 46%. The probability of a larger increase is estimated at only about 1%.

    CME Group’s FedWatch tool shows that investors have raised the probability of a rate hike at the September meeting to 55.7%, an increase of approximately 20 basis points in a single day.

    Warsh says inflation trend has not improved significantly

    Speaking at the Jackson Hole symposium in Wyoming, Federal Reserve Chairman Kevin Warsh said inflation remains elevated.

    Warsh acknowledged that inflation data released during the summer was more positive than expected but said it did not demonstrate a lasting improvement in underlying inflation trends.

    Warsh stated, “While inflation data released this summer was better than expected, it doesn’t indicate a significant improvement in underlying trends.”

    The Fed chairman added that policymakers must ensure inflation is moving clearly and quickly enough toward the level targeted by the central bank.

    Warsh indicated that the Fed could otherwise need to tighten monetary policy further, saying, “Otherwise, we have more work to do. This is our duty, our authority, and our responsibility.”

    However, Warsh did not provide direct guidance on how the Fed will act at upcoming meetings or offer a definitive framework for the economic data that will determine future interest rate decisions.

    U.S. Treasury yields rise after Warsh’s remarks

    Following Warsh’s speech, U.S. stock indexes rose, while selling pressure emerged in the bond market.

    The yield on the 2-year U.S. Treasury note, which is highly sensitive to expectations for Federal Reserve interest rate policy, climbed approximately 8 basis points to 4.31%. That was the highest level for the 2-year yield since the end of July.

    The increase in short-term Treasury yields suggests that investors increasingly expect the Fed to pursue tighter monetary policy in the coming period.

    With approximately two and a half weeks remaining before the September meeting, upcoming inflation and employment data are expected to be critical in determining the direction of interest rate expectations. If inflation remains stronger than expected, the likelihood of a rate hike will increase. A significant slowdown in price pressures, however, could reinforce expectations that the Fed will leave interest rates unchanged.

    This is not investment advice.

  • Fed Chair Kevin Warsh Speaks at Jackson Hole: Highlights and Bitcoin’s Initial Reaction

    Fed Chair Kevin Warsh Speaks at Jackson Hole: Highlights and Bitcoin’s Initial Reaction

    Federal Reserve Chairman Kevin Warsh has begun his highly anticipated address at the Jackson Hole symposium in Jackson Hole, Wyoming.

    In his first speech as Fed chairman, Warsh highlighted inflation as a key concern and adopted a hawkish tone, saying price stability should remain the Federal Reserve’s priority. He noted that although summer inflation data had improved, underlying trends had not changed significantly.

    Key points from Warsh’s Jackson Hole speech

    “I’m struggling to define the financial conditions as restrictive.”

    We need to make sure that the downward trend in inflation is moving towards the target, otherwise we’ll have work to do.

    This summer’s inflation figures are better than expected, but don’t tell me that the underlying trends have changed significantly.

    Consumer spending is healthy, and labor markets are stable.

    The Fed needs to ensure that inflation remains stable.

    The economy remains resilient: consumer spending is healthy, labor markets are stable, and business investment is growing rapidly.

    Warsh also said that at the July meeting, there was a good majority that advocated waiting before changing interest rates.

    Bitcoin falls during Warsh’s speech

    Before Warsh’s address, Bitcoin was trading at around $79,000. After the speech began, its price fell to the $78,000 level. The price movement of Bitcoin during Warsh’s speech was as follows:

    This is not investment advice.

  • Warsh at Jackson Hole: ‘We have work to do’ on inflation

    Warsh at Jackson Hole: ‘We have work to do’ on inflation

    Federal Reserve Chairman Kevin Warsh said the central bank’s “predominant focus” should remain on inflation, striking a hawkish tone in closely watched remarks at the Kansas City Fed’s annual Jackson Hole symposium.

    “The responsibility for 65 months of sustained, elevated inflation sits squarely with the central bank,” said Warsh, delivering his keynote address at the Kansas City’s Fed Jackson Hole symposium.

    “We must be confident that underlying inflation is moving to our objective, clearly and at sufficient speed. Otherwise, we have work to do. That’s our job . . . our mandate . . . and our charge to keep.”

    Markets react to Warsh’s hawkish remarks

    Bitcoin fell to $78,700 following the comments. U.S. stocks were modestly lower, while bond yields moved slightly higher as investors assessed the Federal Reserve chairman’s inflation-focused message.

    Warsh’s speech had been highly anticipated because the Kansas City Fed’s annual Jackson Hole symposium has often served as a venue for U.S. central bank chiefs to prepare markets for major policy changes.