Sherry Cooper Remain Quotations

We remain of the view that next week's rate hike will not be the Fed's last work this cycle. Indeed, they will likely eventually unwind all of last fall's crisis-induced easing.

Bearing in mind that the Fed wants higher inflation, the news is not unwelcome. And the market will remain firmly in the camp that the Fed will not tighten soon, ... Nevertheless, the risks from the PPI are easy to see and look real in light of the big decline of the dollar and rise in import costs that preceded them.

If the incoming data remain relatively soft, including the inflation data, the Fed will take a pass in August, ... Even if they do raise rates, it may well be the end of the tightening cycle, which is very good news for the stock and bond markets.

Despite the pop in core PPI inflation in July, there appears to be little pressure lurking on the horizon in the near term. The pipeline measures remain subdued and vehicle pricing appears to have distorted the figures.

High energy prices keep on working their way through the system. The risks remain skewed to a mild up-creep in core inflation during the months ahead, which will keep the Fed on track for another rate hike in March and likely in May.

All in all, the year-over-year trend in income jumped to 6.1 percent from 5.4 percent, suggesting that consumer fundamentals remain very strong, ... Consumer spending remains on a tear.