Gradual Rate hikes to come, Producer Price Index came in hotter, NFIB small business optimism index rose
February 14, 2017
Fed Chair Yellen is in front of the Senate Banking Committee beginning this morning at 10:00 a.m. ET for her semi-annual Humphrey-Hawkins speech, named for the 1978 law requiring the Fed update to Congress. The markets were looking for any clues as to the path of future interest rate hikes. Ms. Yellen still says gradual rate hikes to come at upcomg meetings. She will deliver the same speech tomorrow in front of the House Financial Services Committee. Ms. Yellen went on to say that fiscal policy is uncertain and that long term housing reform is an important issue.
In economic news, the January Producer Price Index (PPI) came in hotter than expected at 0.6% versus the 0.3% estimated, due to higher gasoline prices, the highest reading since the fall of 2012. Core PPI rose 0.4%, above the 0.2% expected. Year-over-year PPI was unchanged at 1.6%, Core 1.2% from the 1.6% recorded in December. The push-pull PPI data had little impact on the markets.
The National Federation of Independent Business (NFIB) reported this morning that it’s small business optimism index rose to 105.9 in January, the highest point since December 2004. Nearly one-third of those surveyed reported having job openings they could not fill. “Small business owners like what they see so far from Washington,” the NFIB said in a release. In addition, the net percentage of small business owners expect to increase worker compensation rose by four points.
