Futures Soar as Easing Inflation Fuels Hopes for Fed Rate Cuts
Tuesday, Aug 13, 2024 9:00 am ET
U.S. stock index futures hit pre-market highs after a key producer price index (PPI) report for July showed a smaller-than-expected increase, buoying optimism that inflation is easing and the Federal Reserve may soon cut interest rates. S&P 500 futures rose 0.6%, while another index climbed 0.8%.
According to data released by the U.S. Bureau of Labor Statistics on August 13, the PPI for final demand increased by 2.2% year-over-year in July, below the 2.3% estimate and down from 2.6% in June. On a month-to-month basis, PPI rose by 0.1%, falling short of the expected 0.2% rise, and it matched the previous month's 0.2% increase.
The July PPI data underscores a continuing easing of inflationary pressures. The core PPI, which excludes the volatile food and energy categories, was flat on a month-over-month basis, marking its most moderate level in four months, while rising 2.4% year-over-year. This wholesale inflation data precedes the more closely-watched Consumer Price Index (CPI) report, which is set to be released on Wednesday and is expected to show a modest increase.
In the context of diminishing inflationary pressures, the weak July employment data has led economists to forecast a series of rate cuts by the Federal Reserve, starting as early as next month.
According to data released by the U.S. Bureau of Labor Statistics on August 13, the PPI for final demand increased by 2.2% year-over-year in July, below the 2.3% estimate and down from 2.6% in June. On a month-to-month basis, PPI rose by 0.1%, falling short of the expected 0.2% rise, and it matched the previous month's 0.2% increase.
The July PPI data underscores a continuing easing of inflationary pressures. The core PPI, which excludes the volatile food and energy categories, was flat on a month-over-month basis, marking its most moderate level in four months, while rising 2.4% year-over-year. This wholesale inflation data precedes the more closely-watched Consumer Price Index (CPI) report, which is set to be released on Wednesday and is expected to show a modest increase.
In the context of diminishing inflationary pressures, the weak July employment data has led economists to forecast a series of rate cuts by the Federal Reserve, starting as early as next month.