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Two fresh inflation readings for the month of January showed that prices increased more than Wall Street did not expect, but economists have found positive news for the markets and the federal reserve in detail.
During the evaluation of the Consumer Price Categories (IPC) and the Prix Producers (PPI) price index which feeds the Fed preferred inflation gauge, the expenditure index Personal (PCE), economists claim that price increases have probably decreased in January.
The president of Inflation Insights, Omair Sharif, told Yahoo finances that the release of the PPI of Thursday morning had brought “good news” to the fight against inflation of the Fed after the data of the IPC chose the markets on Wednesday. Sharif estimates that the basic “basic” PCE, which excludes the volatile categories of food and energy, will probably show that prices increased by 2.6% in January, decreasing compared to 2.8% observed in December.
“We are just, you know, continuing to go towards the 2% target of the Fed,” said Sharif.
After the release of the PPI, the yield of the treasure at 10 years slipped nearly 10 base points, eliminating its higher movement compared to the day before which had weighed on the actions of the negotiation session on Wednesday. The three main indices were higher as yields moved lower, the NASDAQ composite (^ ixx) adding more than 1%.
The chances that the Federal Reserve has stable interest rates until the end of its July meeting decreased following the press release. Investors are now granting 50% chance that the FED does not lower interest rates at its July meeting, compared to 58% of chance seen the day before, According to the CME Fedwatch tool.
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