Homepage / Investment / Low inflation crimps Fed's ability to hike interest rates this year
Menyelami Dunia Slot Thailand: Keseruan dan Peluang Kemenangan Besar Menyelami Dunia Slot Thailand: Pengalaman Bermain yang Tak Terlupakan অনলাইনে স্লট মেশিন 2025 চালানোর সম্পূর্ণ নির্দেশিকা অনলাইনে স্লট 2025 চালানোর মোট ওভারভিউ Как активировать известные игровые слоты online на игровом портале комета казино Как загружать популярные виртуальные симуляторы в режиме онлайн в виртуальном клубе комета казино Призовые коды и поощрения для посетителей на платформе online 7k казино Подарочные коды и вознаграждения для пользователей в азартном заведении онлайн 7k казино Новые игровые слоты и режимы их загрузки на азартной площадке азино 777 официальный сайт Как в casino азино777 официальный сайт запускать видеослоты на реальные средства Zamanla test edilmişcasino büyük ikramiye ile: yüksek bir zarda nerede bahis oynayabilirsiniz Modernize edilmişcazino rekor nakit ödül ile: Max Bet’te nasıl oynanır En iyisi karlı makineler ödül seçenekleri web-kumarhanesinde AbeBet Tepe kumar slot makineleri Kazanan turlar bir kumar kaynağında Abe Bet casino Yatırım Şartsız Deneme Bonusları ile Hızlı Başlangıç Yapın Onwin Güncel Giriş Online Spor Bahis Siteleri 8359 onwin giriş Güncel Bonusları 1518 grandpashabet giriş Limelight ahead 5 The Majority Of Sought-After Classifications at JeetBuzz 1Win Sports Betting and Casino Official Site Login 1WIN casino official website of the bookmaker, slots, gaming machines 1win: Sitio web oficial del Casino y Casa de Apuestas 2024, Apuestas Deportivas en Línea, Inicio de sesión de 1win 1Win Apuestas Deportivas y Casino Online Bono 500% 1Win Apuestas Deportivas y Casino Online Bono 500% 1win: Sitio web oficial del Casino y Casa de Apuestas 2024, Apuestas Deportivas en Línea, Inicio de sesión de 1win Casino 1Win Argentina Reseña: Todo lo que necesitas saber sobre usabilidad y registro 1win: Sitio web oficial del Casino y Casa de Apuestas 2024, Apuestas Deportivas en Línea, Inicio de sesión de 1win Mines evaluation 1WIN casino official website of the bookmaker, slots, gaming machines 1win App Download 2025 1win apk & iOS download info! The Rise of TrumpCoin: A 2025 Digital Gold Rush 1WIN Sitio web oficial de Apuestas y Casino en línea Bonificación por inscripción $5000 1WIN bet cassino site oficial, slots, jogos de azar, apostas 1WIN bet cassino site oficial, slots, jogos de azar, apostas test-g Ghostwriting: Was ist erlaubt? 1WIN bet cassino site oficial, slots, jogos de azar, apostas Espejos acceso alternativo a los sitio Muchas personas se hacen ahora esta pregunta 10 Mejores Casinos Online en España Guía Actualizada 2025 Start meeting horny girls now – sign up today Find local adult chat sites and relate solely to fun singles generative ai course 1WIN Sitio web oficial de Apuestas y Casino en línea Bonificación por inscripción $5000 1Win Uruguay: Apuestas Deportivas y Casino Oficial The simplest way to meet up sexy women Bahis Sitelerinde Üyelik Bonusu Nasıl Alınır? Find an ideal match with lonely housewife hookup website Master the art of online dirty talk Yeni Başlayanlar İçin En İyi Bahis Siteleri ve Promosyonlar Casino Sitelerinde Hangi Bonuslar Daha Avantajlı? Deneme Bonusları ile Slot Oyunları: Oynamak İçin En İyi Siteler Experience a fantastic and unique option to satisfy brand new people Adjustment in Marriage: 10 Techniques For Newly Married Couples Güncel Bahis Siteleri: Bonus Fırsatları ve Yenilikler 2025’ün En İyi Bahis Stratejileri: Yüksek Oranlarla Kazanma Deneme Bonuslarıyla Oyunları Keşfet: En İyi Siteler Güncel Deneme Bonusları: Hangi Sitelerde Mevcut? Enjoy the greatest adult fuckbook experience now Mature bbw lesbians – find love utilizing the right partner เว็บพนัน ออนไลน์ จับกลางกรุง! บุกทลายฐานเว็บพนันชาวไต้หวันรายใหญ่ เงินหมุนเวียน 500 ล้าน ปี Panduan Lengkap Bermain Slot Online: Strategi & Tips Terbaik Deneme Bonusu ile Ücretsiz Oyun Oynayın Boy Names: Top 1,000 Baby Boy Names in the U S. for 2024 List of most popular given names Wikipedia Mobile Gaming in the UK: Trends, Regulations, and Future Leads Start dating hot moms today – it’s easier than you think Define generative ai 14 Define generative ai 14 How to find the right online gay dating website for you Home Superclones watches Exploring Super Clone Watches: Quality, Accuracy, and Affordability Join the most effective bbw milf dating site today En İyi Bahis Siteleri İçin Seçim Yaparken Nelere Dikkat Edilmeli? At this point, and yet very near | Life and magnificence | Trusted Casino Hellspin Review Leading Online Casino Hellspin Evaluation Mostbet App: Download Mostbet apk for Android & iOS 2024 Ігрові Автомати з Виводом Грошей на Карту ️ Онлайн Ігри на Гривні в Українікращі азартні ігри на гроші з виводом на карту2024-01-08 Taya365 online casino login Tips for conference and dating other bisexual men How to get the right bi partner Exploring the Prospering World of Online Casinos in the UK Meet hot singles and luxuriate in flirty chatting Bahis Siteleri: En İyi Bonuslar ve Promosyonlar Situs Slot Hari Ini Terbaik dan Terpercaya Tahun Ini, Gampang Menang Güvenilir Bonus Veren Siteler ve Detaylı İncelemeler Güncel Giriş, Güvenilir Adres VOX Casino: VOXCasino Promo Code 2025 Get to learn other old gay men inside area Slot Min Depo 10K Terbaik dan Paling Direkomendasi Tahun Ini: Gampang Menang! Scatter Hitam Terbaik dan Paling Direkomendasi Tahun Ini: Gampang Menang! Top 10 Online Casinos in Deutschland Januar 2025 Get ready to unleash your wildest fantasies Ücretsiz Oyun Deneyimi: Deneme Bonuslarıyla Risk Almadan Kazan Bonuslarla Bahis Keyfini Katlamanın Yöntemleri 2025’te Bahis Oynayarak Kazanç Sağlamanın Yolları Freespin Veren Casino Siteleri ile Daha Fazla Eğlenin Casino Sitelerinde En İyi Bonuslar Nerede? The Ultimate Guide to Free Spins BC.Game Mirror – Discover All Current Mirrors Find regional women seeking intimate encounters Elitecasino’a Katýlým saðlayarak, Hýzla 800 TL Bonus Ýmkaný Kazanýn!

Investment

Low inflation crimps Fed's ability to hike interest rates this year

Flat consumer inflation and a surprise drop in June retail sales triggered new doubts that the Federal Reserve will be able to raise interest rates again this year.

“This is a game change for market expectations. Now it’s when does the Fed respond and what does transitory really mean,” said Ian Lyngen, head of U.S. rates strategy at BMO. Lyngen said fed funds futures were reflecting odds for another rate hike this year of just 46 percent, down from 52 percent before the data, according to Lyngen.

Fed Chair Janet Yellen raised the level of anxiety about inflation when she said told a congressional committee this week that the central bank was concerned about low inflation and would change its policy path if it persists. That was a slight departure from previous Fed comments that the softening inflation is “transitory,” and likely due to temporary events like a drop in wireless charges or lower drug prices.

In the bond market, yields fell with the 10-year Treasury briefly dropping through the key 2.30 percent level, raising the prospect of a swift move to 2.20 percent. The yield was at 2.31 percent in late-morning trading. The stock market took the reports in stride and was higher.

Some economists changed their views on the likelihood of a third rate hike for this year. Goldman Sachs economists said the probability of another rate increase went to 60 percent from 70 percent before the CPI report. JPMorgan said a December rate hike now depends on second-half inflation data.

Michael Gapen, chief U.S. economist at Barclays, said the soft data does not change his view that the Fed will start unwinding its balance sheet in September and raise interest rates in December. Citigroup economists also stuck with that view of a December rate hike.

“The [Federal Open Market] Committee is already saying we expect weakness in inflation due to base effects through Q1 of next year,” Gapen said. “Our baseline is they still do the balance sheet in September, and they hike rates in December. I don’t think inflation is likely to alter their plans until early next year. The risk is they alter their path for next year.”

The consumer price index, measuring what consumers pay for everything from apparel to used cars, was unchanged in June from the prior month. From a year earlier, the CPI was up 1.6 percent, the fourth month of surprising weakness. Excluding food and energy, the core prices rose 0.1 percent, compared with expectations for 0.2 percent.

“What I think is happening is that consumer goods are in deflation from things like a structural shift in the retail sector, where e-commerce threatens brick and mortar in a way the traditional retail sector is cutting prices as they try to hold onto market share. It’s a structural threat to their existing business, and they’re competing against it,” Gapen said. He added that overproduction by the auto sector also resulted in lower new and used car prices in the report.

Retail sales fell 0.2 percent in June, down for a second month. That was the first time they fell two months in a row since last summer. The weak retail sales raised concerns in markets about the strength of the economy, but Gapen said he views the report as volatile and leaves his tracking of GDP in the second quarter unchanged at 2.5 percent.

“It just means easier monetary policy and lower rates for longer — that’s the narrative that the equity market is following at the moment. I still think the Fed has a good chance of following through on tapering and I always thought a hike in the second half of the year was going to be a challenge, to put it mildly,” said Lyngen.

But in the bond market, there remains consternation over the Fed’s seeming about-face on inflation concerns, and also Yellen’s comment that the neutral rate will remain below historic levels, suggesting fewer rate hikes in the current policy path.

Global sovereign yields had been rising for the few weeks before Yellen’s testimony on the belief that central banks were beginning to step away from extraordinary easing, led by the Fed.

“This has been a bewildering week as far as the message from the Fed is concerned. I think these inflation numbers have rattled their case somewhat. Janet Yellen’s description of inflation changed from idiosyncratic to unusual. I think she had a handle on what this CPI number was going to be,” said Ward McCarthy, chief financial economist at Jefferies.

The Fed has a target of 2 percent inflation, and core CPI had been at that level throughout 2016. But the central bank’s preferred inflation measure, the PCE deflator, has lagged and was at 1.4 percent.

“I think this has caused some consternation not just with Janet Yellen but with other people at the Fed, as well. It does look like it’s going to slow down the normalization process,” McCarthy said.

John Briggs, head of strategy at NatWest Markets, said investors will now wait for next week’s European Central Bank meeting to see if there is action there.

“People have been whipsawed by central bankers in the last couple of weeks,” he said.

Briggs said he does expect inflation to turn higher later in the year. “Low inflation is the theme of the summer,” he said.

Source: Investment Cnbc
Low inflation crimps Fed's ability to hike interest rates this year

Comments are closed.