PREVIOUS TRADING DAY EVENTS 11 Oct 2023

According to yesterdays PPI data report, the S. producer prices increased more than expected in September amid higher costs for energy products and food. The producer price index for final demand rose 0.5 last month after accelerating by an unrevised 0.7 in August.

The increase in these prices raises questions in regard to how effective are the rate hikes at the moment and if the latest rate hike pause was a good call from the Fed. The report was being closely watched for clues on whether the Federal Reserve will raise interest rates in the future.

The Fed has not finished the job and stamped inflation out completely yet, and if anything, policymakers have their work cut out for them as much of the inflation we see in producer prices is coming from food and energy prices that monetary policy has less effect on, said Christopher Rupkey, chief economist at FWDBONDS in New York.

Gasoline prices rose 5.4, making up more than 40 of the increase in the cost of goods. Though core inflation is cooling, higher gasoline and food prices could hamper progress by raising the cost of other goods as well as making consumers expect inflation to rise.

From the Feds perspective, cooler goods prices are a necessary, but not sufficient, condition in restoring price stability right now, said Will Compernolle, macro strategist at FHN Financial in New York. The most concerning consumer inflation is in core services, which has a weaker…