Core producer prices rose 0% in September. Well, 0% MoM. And 8.5% YoY. But that’s down from August’s 8.7% YoY reading. So that’s good, right? But not good enough.
Sigh. 😮💨
Market participants appear to be tired of the inflation data, particularly because it hasn’t changed all that much. Today’s producer price index showed that the inflation see-saw continues. Marginal improvements in one month are offset by marginal deterioration in other months.
The data shows that inflation is not sustaining progress towards the Fed’s 2% long-term goal. So they’re not going to change their tightening policy anytime soon. It’s pretty simple. 🤷
We can argue all day like Cathie Wood whether the Fed is behind the curve by looking at lagging indicators, but that’s what they’re doing. Until there’s meaningful progress in the data (good or bad), the market will focus its attention elsewhere. 👀
Also, the Federal Reserve released its September minutes this afternoon. There wasn’t much change here, either. Both the minutes and Fed speeches over the last few weeks continue to tow the hawkish line. They’re relying on the backward-looking data, which suggests the tightening will continue.