On Friday, the 9th of August 2019, data released from the US Labor Department had revealed US Producer Price Index was edged higher on July, led by a robust rebound of expenses of energy products, while producer inflation remained benign that bolstered hope for another rate-cut in September this year.
Although, followed by release of US labor market data on producer price index, US President Donald Trump urged again for a full percentage point basis rate-cut saying that Fed had handcuffed a histrionic expansion of US economy, financial markets had been betting on another 25-basis point cut on September’s FOMC minutes.
Nonetheless, latest swath of slanderous data on US economy, a wild week in the Wall St. following provoking comments from US president Donald Trump, dampening outlook of a near-term resolution of his tit-for-tat tariff war with Beijing, alongside tepid inflation report on Friday’s (August 9th) labor department data could encourage Federal Reserve to slash interest rate by a fifty-basis point, suggested analysts.
Besides, referring to US labor Department’s Friday’s (August 9th) data on producer price index that buoyed financial markets’ bet on a rate-cut as early as next month, a chief economist at MUFG in New York, Chris Rupkey said, “Weak producer prices are a reflection of a dramatic slowdown in manufacturing due to the global trade war.
We expect a second rate cut by the Federal Reserve in September as the manufacturing sector and world economies continue to slow”