In June, the U.S. Bureau of Labor Statistics reported no change in producer price index, contrasting with a slight increase in consumer inflation. This indicates that trade tensions from tariffs are not currently affecting inflation rates significantly. Consequently, the Federal Reserve has a more compelling rationale to consider lowering interest rates later this year. Earnings season has started positively, with major companies like J.B. Hunt, Johnson & Johnson, and Bank of America announcing profits that surpassed expectations, contributing to market optimism as evidenced by a rise in the Vanguard S&P 500 ETF.
The producer price index was flat month over month, rather than increasing 0.2% as expected. This shows no change in inflation rates.
Trade turmoil from President Trump's tariffs isn't yet causing any particularly worrisome spike in inflation. The Federal Reserve now has more of an excuse for lowering interest rates.
Earnings season is upon us, with companies like J.B. Hunt, Johnson & Johnson, and Bank of America reporting better than expected profits.
The Vanguard S&P 500 ETF seems happy to hear that [no increase in producer inflation], and is up 0.2% premarket.
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