FED: Goolsbee A Little Less Worried On Inflation Than Earlier In The Week
Aug-15 12:53
“GOOLSBEE: IF KEEP GETTING INFLATION REPORTS LIKE WE HAD EARLIER, TOTALLY FINE TO BRING RATES TO WHERE THEY WILL SETTLE” - RTRS
“GOOLSBEE: IF WE GET A HINT FOR SEPT, OR LATER IN FALL, THAT WE ARE NOT IN AN INFLATIONARY SPIRAL, WE CAN CUT RATES”
- These comments helped Tsys off lows and promoted stabilsation/dovish ticks in the short end.
- A reminder that Goolsbee sounded more cautious after this week's CPI reading.
- Back then, he noted that FOMC meetings in the fall are "going to be live" but he's "uneasy" about the idea that tariffs have only a one-off impact on prices and that he wants more surety that inflation won’t be persistent.
- Today, it was more like "GOOLSBEE: LET'S NOT OVERREACT TO ONE MONTH OF PPI, CPI, IMPORT PRICES, BUT AN AREA OF CONCERN" - RTRS
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US DATA: Core PCE Estimates Could Be Trimmed Following Neutral PPI Readthrough
Jul-16 12:47
- Our crude proxy for key PPI contributions to core PCE sees another broadly neutral month in June, implying a boost of 0.02pp after a slightly upward revised 0.01pp in May (initially -0.01pp).
- For comparison, it follows -0.07pp in Apr, 0.07pp in Mar and 0.19pp in Feb.
- As such, it could leave core PCE estimates drift back a little closer to yesterday’s core CPI of 0.23% M/M vs pre-PPI core PCE estimates averaging 0.31% M/M. Of course that does also depend on what analysts expectations for particular line items.
- Reiterating how it’s not an exact science: whilst this rough proxy implies little boost from PPI details in May, there was still a slight gap between the 0.18% M/M currently seen for core PCE and 0.13% for core CPI.
SOFR OPTIONS: BLOCK/Pit: Dec'25 Call Condor Sale
Jul-16 12:46
total -10,000 SFRZ5 96.25/96.50/96.75/97.00 call condors, 3.75
US TSYS: Post-PPI React
Jul-16 12:35
- Treasury futures inch higher after lower than expected PPI inflation measures
- Currently, Sep'25 10Y contract trades +7.5 at 110-16.5 (110-08.5L / 110-16.5H). Initial technical resistance above at 111-01 (20-day EMA). Support below at 110-08.5 (Low Jul 14)
- Curves remain flatter/off lows: 2s10s -1.189 at 52.551; 5s30s -1.279 at 96.631.
- USD: Modest dip lower for the greenback on the release, most notable from the move from 148.80 to 148.50 for USDJPY eroding a very small portion of yesterday’s advance for now.
