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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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
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