The President said there’s hardly any inflation at all, citing that 401(k)s and the stock market are soaring.
U.S. President Donald Trump said inflation has hit the ‘perfect number’ during remarks celebrating the 90th anniversary of the Social Security Act at the White House.
“Inflation is now down to the perfect number. We’ve ended Biden’s inflation nightmare,” the President said, citing that 401(k)s and the stock market are soaring. “There’s hardly any inflation at all.”
His remarks come after July’s producer price index (PPI) came in hotter than expected. PPI rose 0.9% in July on a month-on-month basis and 3.3% year-on-year. Core PPI, which excludes food and energy prices, also jumped 0.9% in July with a year-on-year gain of 3.7%. According to the Bureau of Labor Statistics, July’s PPI inflation report marked the largest jump seen in three years.
The equity markets trended in the red during afternoon trade, with the data reducing hopes around the Federal Reserve cutting rates in September. The SPDR S&P 500 ETF (SPY) and the Nasdaq-tracking Invesco QQQ Trust (QQQ) were down 0.07%. The SPDR Dow Jones Industrial Average ETF (DIA) slipped 0.25%. Retail sentiment around the S&P 500 ETF and QQQ on Stocktwits was in the ‘neutral’ territory.
U.S. Treasury Secretary has pushed for a 50 basis point cut this week, citing Tuesday’s consumer price index (CPI) numbers, which showed that inflation rose less than expected in July.
However, Federal Reserve Bank of St. Louis President Alberto Musalem hinted that a cut may not be on the cards just yet. He said it’s still too soon for him to decide on whether to support a rate reduction at next month’s policy meeting. “For me, it’s too early to say exactly what policy I will be able to support” at the September meeting, Musalem told CNBC on Thursday.
He noted that while recent data offers some signs of the potential for more persistent inflation, there are also “downside risks for the labor market” to consider. “I’m weighing both things,” Musalem said. “When we see tension between our two mandated goals, we need to follow a balanced approach.”
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