Wednesday 15th May, 2024, page-3

Actually, Powell’s prepared comments last night made to a bankers meeting in Amsterdam (5pm local time, 10am in New York) appear to have been based only on the Jan-Mar inflation figures, without consideration of the April PPI reports released moments earlier.

However (presumably after his speech) when asked about the April producer-price-index data released earlier Tuesday, Powell characterised it as “quite mixed.” He noted that March data was revised lower. In April, the PPI rose 0.5%, much higher than the 0.3% that had been expected. But the change in the index in March was revised from a 0.2% gain to a 0.1% decline.“I wouldn’t call it hot,” Powell said.

The combined effect of the prepared speech and subsequent comments is a very clear message that hell will freeze over before Powell concedes rising inflation means a rate rise is likely … his playbook will be holding for longer it seems … and markets naturally like that.

Dex