[Music] All right markets are opening and Reacting to new economic data after the July producer price index was released Earlier this morning those PPI numbers Are showing wholesale prices had a Slight increase in July compared to June Raising 110th of a percent overall from June that's still up 2.2% from July of 2023 the CBS News contributor jaier deid Is joining us now to break down what This report means jaier always good to See you so it's like a slight increase Is that kind of keeping in line with What we've already been kind of seeing What how do you kind of digest this Report yeah anytime you hear the words Less than expected in the context of Inflation that's unequivocally good news Especially given the Run of hot data That we've had since the beginning of The year um July's price data kind of Told us more or less what we wanted to Here and what we've certainly come to Expect that price pressures in the Economy are moderating combined with a Labor market that is decisively less hot Than it used to be um all of this is Coming together and you know moving Decisively in the direction that the FED Wants and it really does put a September Rate cut in play so there's also an Updated inflation report that's coming Out tomorrow what are the expectations
For that yeah so we're hoping hoping um That that will continue to tell the Story of an economy that is not falling Off of the cliff but at least demand is Starting to moderate in a way that um is Giving way to cooler inflation so prices Are still Rising but they are rising at A much more moderate Pace uh we have Again the the jobs Market that is um you Know helpful or conducive uh to what we Want to see and certainly what the FED Wants to see so hopefully um consumer Prices uh we'll be watching those Closely and that'll continue to sort of Give us cause for optimism um yeah you Had mentioned you know the possibility Of a rate cut come September um I think In like previous conversations I felt Like really secure that that was going To happen but then we had some like Messiness happen over the last couple of Weeks but what we're seeing right now This is the sort of thing that the FED Has already said that they've been Looking For right and you know we September is Going to be critical because it's Already sort of most a certainty that We're going to get a rate cut it really Is a question of hey how big it will be After last week we all thought uh maybe The FED should do 50 basis points but You know the market sort of corrected Itself um it looked as if that one sort
Of Black Monday that we had yeah um Going to be a lasting effect but it did Not uh but September's language will be Critical what the markets are going to Be looking for more or less um is an Indication that the FED sort of sees the Balance of risks tilting um in the favor Or in the direction of weakness in the Labor market so the FED has two mandates Right it's got price stability inflation And it also has a mandate for Full Employment so what the markets will be Looking for and parsing the language um Carefully is is this the start of a Sustained rate easing campaign and does The fed or is are they starting to feel A little bit um a little bit disquieted About what's happening in the labor Market enough to kind of move Aggressively so the last time you and I Spoke which was a little while ago cuz I Went on vacation um the markets around The world were freaking out cuz we had Some you know less than desirable Unemployment and and jobs numbers and Then like the stock market in Japan like Went off a cliff um and then all of a Sudden everything corrected itself and I Thought to myself gez these numbers seem To me to indicate you know a soft Landing it was like a little bit of a Tweak in employment why why is are why Is the world freaking out but I also Wonder if um you know there's such sort
Of heightened sensitivity to what Happens here that if we get another bad You know report we're going to see that Same kind of volatil volatility happen Sort of around the world again Absolutely look I I markets have a Tendency to overreact and I've say this A million times and my former boss samro Called it in his newsletter in air Pocket um and that's precisely what it Was he often stocks usually go up in the Long term last week's volatility it was Black Monday we were talking about Emergency rate kites um you know the World was sort of ending uh but it sort Of underscores something that's really Important to if you're in this business And you're watching it for a long time The need to not overreact to short-term Volatility these things do happen you Got to keep your eye on the long term You know one day in a markets is Practically a lifetime and as we now Know that entire move has reversed Itself and that's kind of like you know Investors get jittery and they when you Get jittery you you make emotional Decisions you hit the sell button um but All of a sudden the very next day or Even the next hour uh you get some data Point that makes you feel you know Boolean all over again so again it's It's important to not overreact right Everyone settle down heavier David thank
You very much thing
