Deflation Pushes Producer Prices To 28-Month Lows Ahead Of Fed's Interest Rate Decision
Portfolio Pulse from Piero Cingari
US Producer Price Index (PPI) fell 0.3% MoM in May, indicating deflation and raising expectations of a pause in the Fed's interest rate hike cycle. Treasury yields and the dollar declined, while S&P 500 futures remained mostly flat.
June 14, 2023 | 12:47 pm
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NEGATIVE IMPACT
The Invesco DB USD Index Bullish Fund ETF (UUP) extended losses, falling 0.3% on the day as the dollar weakened following the PPI report.
The PPI report indicates deflation, which raises expectations of a pause in the Fed's interest rate hike cycle. This has led to a weaker dollar, causing the UUP ETF to extend its losses.
CONFIDENCE 85
IMPORTANCE 70
RELEVANCE 80
NEUTRAL IMPACT
Futures contracts on the S&P 500 index, tracked by the SPDR S&P 500 ETF Trust (SPY), remained mostly flat ahead of the opening bell on Wall Street.
The PPI report has raised expectations of a pause in the Fed's interest rate hike cycle, but the impact on the S&P 500 futures has been neutral, as investors await further developments and the upcoming Fed decision.
CONFIDENCE 85
IMPORTANCE 60
RELEVANCE 80