📝 May ISM PMI Reduces Fed's Urgency For A June Hike: Wells Fargo

May notches the seventh straight month of contraction for the bellwether ISM, a run that is rarely seen outside of recession. That said, we know from conversations with manufacturing clients and from the industry sector-level data in the ISM that not all industries are in free fall. This may explain why the prices paid index, with its on-again, off-again readouts have been inconclusive about the direction of price pressures. Prices paid has literally been in contraction one month and expansion the next every month so far this year. Still, the dip in May takes it to a fresh 2023 low and also marks the biggest sequential decline since July 2022. This development may diminish some of the Fed's urgency to deliver yet another rate hike at its upcoming meeting later this month.