U.S. industrial production flatlined in August with manufacturing output declining 0.3 percent, according to the Federal Reserve’s G.17 report. Capacity utilization held steady at 76.3 percent, 3.1 percentage points below the long-run historical average. The ISM Manufacturing PMI reached 54.6 in August, marking eight consecutive months of growth, though new orders showed signs of cooling. The Fed raised rates by 25 basis points on September 16, bringing the target range to 3.75 percent to 4.00 percent, its first hike in three years. Meanwhile, 10-year Treasury yields are approaching 5 percent, raising the cost of debt financing for capital expenditures and inventory management.
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