PPI Data, Warsh Testimony Cut Rate Hike Odds
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- PPI data lowered market odds of interest rate increases this year, reinforcing a dovish shift in expectations
- Kevin Warsh is testifying on Capitol Hill for a second day Wednesday before the Senate Banking Committee, following Tuesday's appearance before the House
- June inflation data combined with Warsh's House hearing comments led the source to conclude a rate increase is unlikely
Why it matters: Lower rate-hike odds ease borrowing costs for consumers and businesses and support equity multiples that benefit from stable rates, but the Fed's path depends on whether upcoming data — including the jobs report — confirms the disinflationary trend Warsh's testimony points toward.
