The unchanged level of the ISM Services Prices Paid Index at 70.7 in April is not the worst outcome, given its manufacturing counterpart surged to a four-year high of 84.6 in the same month. Even so, it leaves our weighted index across the two sectors at a level consistent with all-items CPI inflation rising to 4% mid-year, which will reinforce the view among hawks on the FOMC that underlying inflation pressures remain too strong to justify an easing bias.
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