Daily News 19

Tag: Producer Price Index

  • 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 jake.conley@yahooinc.com.

  • 10-year Treasury yield tops 4.9%, highest since 2023, as oil surge raises inflation fears

    10-year Treasury yield tops 4.9%, highest since 2023, as oil surge raises inflation fears

    Treasury Yields Surge to Multiyear Highs as Oil Tops $100

    U.S. Treasury yields climbed to multiyear highs on Thursday, driven by a spike in oil prices that overshadowed a relatively benign wholesale inflation report. The benchmark 10-year Treasury note yield rose more than 6 basis points to 4.908%, marking its highest level since November 2023. This yield serves as a critical reference point for mortgage rates, auto loans, and credit card debt.

    Short- and Long-Term Yields Follow Suit

    The 2-year Treasury note yield, which is highly sensitive to near-term Federal Reserve policy expectations, reached 4.518% — its highest point since July 2023. Meanwhile, the 30-year Treasury bond yield advanced more than 4 basis points to 5.332%, reflecting broader geopolitical risk premiums. Yields move inversely to prices; one basis point equals 0.01%.

    Oil Price Spike Fuels Inflation Concerns

    The selloff in bonds accelerated after U.S. oil prices breached $100 per barrel on Thursday, stoked by fears of a prolonged Middle East conflict involving the U.S. and Iran. Higher energy costs threaten to reignite inflationary pressures, potentially altering the trajectory of interest rates.

    Wholesale Inflation Data Comes In Mixed

    Thursday’s Producer Price Index (PPI) report showed headline wholesale prices rose 0.4% in August, matching Dow Jones consensus estimates. Excluding volatile food and energy categories, core PPI increased just 0.2%, coming in below the forecasted 0.3% gain. The data did little to calm markets already focused on the oil-driven inflation risk.

    Treasury Buyback Adds to Supply Dynamics

    Yields had already risen Wednesday following an announcement by Treasury Secretary Scott Bessent that the department would buy back $6 billion of longer-dated government bonds. The operation added to the supply-side narrative pressuring longer maturities.

    Focus Shifts to CPI and Fed Decision

    With the PPI data released and the 10-year yield testing multiyear peaks, investors are now turning their attention to Friday’s Consumer Price Index (CPI) report for a clearer picture of consumer-level inflation. Next week’s Federal Reserve interest rate decision will be the next major catalyst for rate markets.