The ISM index (created by the Institute for Supply Management) fell to a two and a half year low in May. So much for me thinking that there might be a possible uptick based on the regional Fed surveys! The preliminary estimate of the May PMI index (Purchasing Manager Index, created by IHS Markit) was revised down—usually a sign of weakness. The line to watch in the chart below is the green line which is the average of the two surveys, a calculation which reduces random fluctuations caused by sampling error.
At this stage, the Fed must be seriously considering whether to cut rates—the markets certainly think it is, with bond yields plunging. Meself, I think they'll wait for more data. Employment and GDP have both been strong, though of course, that says nothing about their future paths. We get employment data on Friday, US time (Saturday in Oz).
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