Today’s PPI Recap Is Brought To You By
The December Producer Price Index (PPI) just dropped, and here’s the big takeaway: wholesale inflation came in lower than expected.
Annual PPI rose 3.3%, below the forecasted 3.5%.
Month-over-month PPI increased 0.2%, half of what economists projected.
Core PPI? Flat growth month-over-month, surprising analysts who expected a 0.3% bump.
Why does this matter?
📉 Inflation Pressure Easing:
Lower wholesale prices mean less upward pressure on consumer prices, which could help ease the Fed’s inflation worries.
🏛️ The Fed’s Tightrope:
While this report buys the Fed some breathing room, it doesn’t mean rate cuts are around the corner. Markets don’t expect a cut until June at the earliest.
📊 What’s Next:
Tomorrow’s CPI report will be a key indicator. Economists predict core inflation will remain at 3.3% annually, marking five straight months at this level.
This PPI report gives a glimmer of hope, but it’s just one piece of the puzzle. Inflation’s road to the Fed’s 2% target remains long, and your wallet is likely to feel the pinch for a while longer.
Stay tuned for tomorrow’s CPI update. The stakes are high, and the Fed is watching.
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