Weaker US PPI Validates Fed Rate Cut View

News

The weak producer inflation readings reported by the Labor Department on Tuesday came against the backdrop of a slowing economy amid trade tensions and cooling growth overseas. The Fed cut rates in September after reducing borrowing costs in July for the first time since 2008, to keep the longest economic expansion on record, now in its 11th year, on track.

The producer price index for final demand dropped 0.3% last month, weighed down by decreases in the costs of goods and services, the government said. That was the largest decline since January and followed a 0.1% gain in August.



In the 12 months through September the PPI increased 1.4%, the smallest gain since November 2016, after rising 1.8% in August. Economists polled by Reuters had forecast the PPI nudging up 0.1% in September and advancing 1.8% on a year-on-year basis.

Excluding the volatile food, energy and trade services components, producer prices were unchanged last month after jumping 0.4% in August. The so-called core PPI increased 1.7% in the 12 months through September after climbing 1.9% in August.

via Reuters

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Alfonso Esparza

Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency
trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.

Alfonso Esparza

Alfonso Esparza

Alfonso Esparza

Latest posts by Alfonso Esparza (see all)

Products You May Like

Articles You May Like

The Trade War That Never Stops
Pound Retraces Slightly on Brexit Caution
A Nobel economics prize goes to pioneers in understanding poverty
How stories can help explain booms and busts
Scary Like Monday Morning

Leave a Reply

Your email address will not be published. Required fields are marked *