Inflation Data and Fed Testimony: Cooler CPI/PPI, Hawkish Warsh, Philly Fed Surprise
Key Questions
What did the latest CPI and PPI data show about inflation trends?
CPI and PPI data released last week came in cooler than expected, easing Fed hike odds. Retail sales were in line with expectations while jobless claims were lower.
How did Fed Governor Warsh's testimony affect market views on rate policy?
Warsh's July 16 testimony was hawkish, with Fed hawks continuing to push for rate hikes even as markets priced in easing. New data showed the Philly Fed non-manufacturing index rebounding to +7.4 from -25.8.
What was the significance of the Philly Fed non-manufacturing index reading?
The index snapped back to +7.4, its first positive print since October 2024, though prices paid stayed elevated at +28.2. The dollar strengthened on strong data but eased after cooler CPI prints.
CPI and PPI data released last week came in cooler than expected, easing Fed hike odds. Retail sales in line, jobless claims lower, Philly Fed manufacturing strong. Consumer sentiment hit five-month high. Fed Governor Warsh testimony Thursday (July 16) was hawkish; Fed hawks still pushing for rate hikes but market now pricing easing. New data: Philly Fed non-manufacturing index snapped back to +7.4 from -25.8, first positive since Oct 2024, but prices paid at +28.2 keeps inflation alive. Dollar strengthened on strong data but eased after cooler CPI. Market expects data to influence rate path.