Instant View 2: Consumer prices unchanged in June
07/17/2012| 08:51am US/Eastern
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(Reuters) - U.S. consumer prices were unchanged in June, and rose just 0.2 percent when excluding volatile food and energy prices, the Commerce Department said Tuesday.
STORY: TABLE
KEY POINTS: The Consumer Price Index fell 0.3 percent in May and June's reading was in line with economists expectations. * Stripping out food and energy, inflation pressures were also benign. Core CPI rose 0.2 percent for a fourth straight month, the Labor Department said on Tuesday. The data was the latest sign of tepid domestic demand and provided the Fed with some room to maneuver as it weighs options to aid the economic recovery, which has slowed significantly in recent months. * Minutes of the U.S. central bank's June meeting released last week showed the Fed was open to buying more Treasury bonds to spur the economy, but the recovery would probably need to weaken further for broad consensus among policymakers.
COMMENTS:
WILLIAM LARKIN, FIXED INCOME PORTFOLIO MANAGER, CABOT MONEY MANAGEMENT, SALEM, MASSACHUSETTS:
"I don't see any big surprises. There was a slight reaction in the 10-year (Treasury note). But the 10-year is priced in what I call the cautious zone, when you are priced under 1.50 (percent) there is a little bit of fear built into the system. My note would be that CPI was basically in line with expectations.
"Inflation is not on peoples' radar, there are just too many other things that can trip up the economy."
WAYNE KAUFMAN, CHIEF MARKET ANALYST, JOHN THOMAS FINANCIAL, NEW YORK
"Looks like a non-event, it is pretty in-line with expectations. Inflation is subdued. I don't see this as anything important."
MARKET REACTION:
STOCKS: U.S. stock index futures pared gains.
BONDS: U.S. bond prices were steady at lower levels.
FOREX: The dollar rose modestly against the euro.
(Americas Economics and Markets Desk; +1-646 223-6300)
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