Flat producer prices meet a rate-hike call and a record S&P close
Producer prices held flat in July while Cleveland Fed President Hammack pressed for tighter policy and the S&P 500 closed at a record. One data day split the policy and market readings.
Economics & Markets··Night
Producer prices held flat in July
BLS said the final demand producer price index was unchanged in July and stood 4.7 per cent higher over 12 months. Stripping out foods, energy and trade services, the index rose 0.4 per cent on the month and 4.7 per cent over the year. Final demand goods prices fell 0.7 per cent, with energy down 3.1 per cent and foods down 0.9 per cent. Services edged up 0.2 per cent and construction rose 2.2 per cent. The release notes that data for March through June were revised for late reports and respondent corrections, so some figures differ from those published earlier. The headline wholesale reading therefore paused for a month while the core measure excluding foods, energy and trade services still climbed. The monthly soft spot concentrated in goods, placing cooling in energy and food next to persistent service and construction pressure in the same bulletin. That leaves the cooler wholesale headline short of settling the tightening debate on its own.[1]
Hammack pressed for an immediate rate increase
According to The Globe and Mail, Cleveland Fed President Beth Hammack reiterated on Thursday that policy should tighten now to bring inflation from above 3 per cent back to the 2 per cent objective. Hammack was one of three officials who dissented last month against the majority that held the range between 3.50 per cent and 3.75 per cent. Speaking at the Dayton Area Chamber of Commerce, she said businesses are eager to borrow and invest and that too much of that growth could add to price pressure. She said the past two months of better data have not convinced her the tide has turned, noting it has been more than five years since the Fed last hit its 2 per cent target. The remarks are not framed as a direct reply to the same day's producer-price release; Hammack's case rests on a broader inflation and demand outlook. On the policy side, a call for tighter settings therefore remained on the table as a separate voice from the cooler wholesale headline. On the same calendar day, softer data sat beside an official still pressing to tighten.[2]
The S&P hit a record as hold odds rose
The Detroit News reported that in the New York afternoon the S&P 500 was up 0.43 per cent at 7,781.59 and the Nasdaq Composite up 0.58 per cent at 26,741.66, while the Dow Jones Industrial Average slipped 0.18 per cent to 53,674.13. Brent fell 3 per cent after six sessions of gains. Futures put the chance of a Fed hold at 65 per cent, up from 60 per cent before the data. Cisco fell 9 per cent and Tapestry dropped 14 per cent during the session, while Dell gained 2.7 per cent and HP 4 per cent. Investors tied the retreat in oil to expectations for weaker demand this year and higher US crude stocks, the report said. Cooler wholesale inflation and a record equity close therefore sit on the same calendar day; that is reported co-timing and market commentary, not proof that every move shares one cause. Hammack's call for tighter policy and the rise in futures odds of a hold also stand as divergent same-day readings rather than a single agreed path. Data, a policy voice and the equity tape thus share a calendar without proving one causal chain.[3], [1], [2]
