All posts tagged: Financial Report

Last week’s inflation data came in at a higher rate than expected, with Price Producer Index (PPI) numbers showing more than double the expected inflation gain.

With both CPI and PPI being over the target, the steadfast certainty that the Federal Reserve will cut rates has now taken a step back, resulting in more tamed expectations for the near future.

With a mixed response from lending partners, this may end up rapidly changing in the next round of discussions with the Federal Reserve’s Chairman Jerome Powell this coming week, as well as a final rate decision.

With a focus on the upcoming inflation data reports with CPI and PPI this week, the previous week was very light on data. The only relevant reports released were the non-farm payroll and U.S. trade balance data releases. Job reports are showing robust hiring numbers and the trade balance remains within expectations. There appears to be to not much to fear coming from this next round of inflation data. Lending partners are reflecting this sentiment as they continue to cut rates.

A number of important consumer related data reports were released last week, giving us a clearer picture on inflation impacts and the state of the economy on a broader scale. First up, looking at the First Revision of GDP numbers, we are seeing they had fallen slightly below expectations, but still showing the economy has not deflated at all as of the result of the prior years’ repeated rate hikes.

A government holiday followed by an extremely light release schedule has led to a limited amount of data, with the FOMC Minutes being the only impactful report for the prior week. The Federal Reserve had stated they will continue to maintain their current stance in light of the most recent inflation data. With rates holding into the year, as a result, lending partners have started back tracking some of their recent rate cuts. Lastly, Unemployment Numbers are seen to be well within expectations.

Last week’s release of CPI and PPI resulted in slightly higher than expected inflation rates which led to speculation that the Federal Reserve’s decision to cut rates will likely come much further in the year than anticipated. There was some suspicion that if inflation rates would continue to exceed predictions, it could result in another rate hike. Lending partners have responded in kind with the first significant increase in lending rates since the end of November. However, The Federal Reserve will likely maintain its current stance.

Next week is the release of Core CPI and PPI numbers for January, resulting in an extremely light week for the week. The only data release of note is the trade deficit and the usual unemployment reports. The current trade deficit for the U.S. is operating precisely within expectations and correlating GDP numbers. Next week will provide further guidance for the Federal Reserve as the next release of inflation data is released.

The largest and most impactful financial data being released is as always the Federal Reserve rate decision. This time it fit well within the expectations across the broader market and lending partners, in that the Federal Reserve still remains to hold current standing, and is showing push back on any potential rate cuts coming March when the next rate decision is planned.

The following week of CPI and PPI reports are typically lighter, with this week showing the same trend. There are a number of interesting interim reports that are worth noting however, including the Federal Reserve’s Beige Book which indicates the labor market has been cooling across most of the country. Following up is the Consumer Sentiment Reports, which is an excellent indicator for how the average consumer feels about their buying power, reflecting on the current economic conditions. Slower inflation, cheaper gas and a healthy economy have boosted optimism. Lastly, retail sales reports showing activity in December.

With the release of the CPI and PPI we received a clearer picture of what’s ahead. With the inflation numbers for CPI (Consumer Price Index) arriving a bit warmer than expected, there was some speculation that it could cause some hesitation from the Federal Reserve on reducing rates for this year.

With the first FOMC minutes of the year, it sets the tone of the potential moves the Federal Reserve will make, with them remaining firm in their current stance of not employing any rate cuts, however given the more recent end of year reports, there is a likelihood that rate cuts will start this year. The last change in rates was in July of last year. The second most important report also being the final PMI (Manufacturing) numbers, which has largely met expectations without any irregularities.