Markets still expect Sept. Fed rate cut, despite hot PPI data
00:00 Speaker A
Also interesting thing is Jen, we don’t see it, uh, at least this morning this morning so much funding futures feed. This is not the sum of inflation expectations from interest rate expectations, but an instant image.
00:17 Jen
Yes, it is interesting to keep 90% plus and above. Um, but still, we know that the market is trying to force the Fed’s hand and there is volatility in these reports. That’s why we’ll have to see. We’il buy another rifle. We will get another PPI before September. But I think I’m studying this morning, you just saw that you haven’t seen the good side of PPI Pop Up, and the side of the services. And UH, yesterday, Chicago FED President Austin Goolsbee’den news and talked about the CPI number, said the services that are interested in it, said the services increased. Therefore, if we see that inflation increases not only on the goods side but also on the service side, this will be for the FED. They will have to see more reports before making any decisions. However, if the inflation is not on the goods lane and the FED is poured into the services that it was worried about before, we have seen that inflation came down before this last routine returned, then something to be searched.
02:00 Speaker A
Um, and Ali, you know, of course, this is not only fed with futures. We can look at my spectrum and we have definitely seen that stocks react negatively.
02:10 Ali
Yes, the stock futures that fall on the board here. And the Fed Fund Fundures, UH, is interesting to see that 95% of it is still circulating in September when it comes to ratio interruptions, because it is normally associated with what we see in the stock market. I am currently looking at bond returns. And 10 years of yield is still low and is around 4.2%. So we don’t see this, UH, the re -calibration of ratio reduction expectations, but when you think that Wall Street may have real FOMC officials, we have a wide range of distribution when you think what Wall Street thinks. And the reason for this is that Jed implied, the Fed was really caught among two bilateral tasks. And although there is something better than the feared CPI pressure, let’s not forget that nuclear services are strengthened. And this is what I hear from my resources, the fact that we have a firm service inflation. This may balance the increases we see on the good side due to tariffs. And as you said, Julie, in this earning season, we heard that they sucked most of these costs from businesses. However, from the first comment at the Wall Street, it will only take too long, and eventually it needs to pass to this consumer price index and our real wallets. This autumn and even until 2026 is something to pay attention to, because economists tell us this. We will not see this tariff immediately passed. It will take longer time. And I think the markets were a bit excited after this CPI report the other day, perhaps I think we won’t see this effect exactly. I may not only be real than this hot PPI pressure.
