Reply To: Traders Market Weekly: Powell Testifies


The Producer Price Index for final demand declined 0.3% month-over-month in May (consensus -0.1%) while the index for final demand, less foods and energy (“core PPI) increased 0.2% month-over-month, as expected.

On a year-over-year basis, the index for final demand was up 1.1% year-over-year, versus 2.3% in April, and the index for final demand less foods and energy was up 2.8% year-over-year, versus 3.2% in April.

The key takeaway from the report is the recognition that wholesale inflation is moving in the right direction, which should be pleasing to the Fed and a reprieve for corporate profit margins.

Treasury yields turned lower in response to the data.

The 2-yr note yield, at 4.66% shortly before the release, is down nine basis points to 4.61%. The 10-yr note yield, at 3.81% just before 8:30 a.m. ET, is down six basis points to 3.78%.