Inflation Relief
Producer prices ease anxieties.
Of course Producer Price Index data for March was cooler than forecast. That’s just the way things are going in the “incoming data” era.And, of course, the 8:30 a.m. ET release eventually gave way to some nice, healthy price action on Thursday.
The S&P 500 made up all the ground it lost to Wednesday’s hotter-than-forecast Consumer Price Index data after lunch before easing into the close.
It could be the case that a strong economy continues to make a rate cut seem unnecessary. And it’s hard to understand that as a negative.
I do like to keep it simple, but I’m aware of the risk of going too far in that direction. Still, an expanding economy is a healthy economy.
The other thing is, the Federal Reserve’s favorite inflation gauge is the Personal Consumption Expenditure Price Index, as we’ve discussed. That number won’t be out until April 26.
We know, though, that the softer PPI data will have a greater impact than the harder CPI data.
What that means for the timing of a rate cut is still hard to figure.