This week’s CPI and PPI are coming out together. Break them down and you’ll see it more clearly. CPI already hit the tape yesterday and fully matched expectations. Tonight’s PPI and initial jobless claims are the second “shoe.” The cover places the two numbers side by side.
【What CPI has already said】
(For the structure chart, see the cover and the chart in the body. Please cross-check against the blue line oscillation and the Fib dashed line on the right.)
The U.S. Bureau of Labor Statistics released July CPI. Overall, it rose 0.1% month over month and 3.4% year over year, versus the prior 3.5%. Core CPI rose 0.2% month over month and 2.5% year over year, versus the prior 2.6%. All the Dow Jones consensus expectations were met—classic “met expectations” pricing.
By components, energy fell again by about 1.5% month over month, after the big drop in June. Food and shelter each rose about 0.1%. Shelter still accounts for the largest share of the overall month-over-month increase, but it has moved away from the sharp drop in lodging costs, keeping housing pressure contained. Airline fares jumped about 2.2% month over month, while medical care rose about 0.4%. On a year-over-year basis, inflation remains above the Fed’s 2% target, but the monthly readings have not reignited the fire.
Market reaction was very direct. U.S. stock index futures were slightly warm, while Treasury yields fell. The CME FedWatch data cited by multiple sources shows the probability of a September rate hike was pushed further down to around the low 40% range, while the probability of staying put increased. This matches the “no need to rush” narrative that emerged after last week’s softer employment data.
【What to watch in tonight’s PPI】
At 8:30 p.m. Beijing time on August 13, the Department of Labor will release July PPI, with initial jobless claims also reported at the same time. Consensus is roughly 0.2% month over month for headline PPI, versus -0.3% prior. Year over year is expected to be about 4.9%, versus 5.5% prior. Core PPI is expected to rise 0.3% month over month, and 4.2% year over year.
Why look at PPI when CPI is already cool. The producer price components can feed into core PCE. Medical care, airline fares, and financial services are all on the watch list. CPI looks at what’s in consumers’ pockets, while PPI looks at whether costs on the business side are re-accelerating. If both sides cool in the same direction, it’s easier for the “stay put” stance in September to hold. If PPI is clearly “hot,” the rate-hike trade will come back.
On Friday, there will also be July retail sales; the market broadly expects a slight month-over-month increase. That will be the next shot at whether consumption is losing steam.
【Don’t forget the interest-rate backdrop】
Currently, the federal funds target range is 3.50% to 3.75%. The July FOMC held rates steady with a 9–3 vote, with three dissenting members arguing for a rate hike. Before the September meeting, markets will still go through another round of August employment and inflation data. So tonight’s data matters, but it’s not the final word.
【How to read it on the crypto side】
As of writing, BTC is around 63,835 and ETH around 1,893. Inflation met expectations and the urgency for hikes fell—typically friendly for risk assets. But prices had already traded in parts of the employment and CPI expectations in advance. Going forward, volatility is more likely to come from PPI coming in above expectations, or initial jobless claims unexpectedly strengthening or weakening.
Reading the tape can be broken into three tiers.
If year-over-year PPI falls below 5%, month over month doesn’t blow out, and initial jobless claims don’t deteriorate sharply—bullish observation can continue.
If year-over-year PPI is clearly higher than expected, or core month-over-month is too hot—rates trading returns, and crypto is more likely to face downward pressure first.
Numbers are neutral, but if Friday’s retail sales collapses, the narrative shifts from inflation to growth, and volatility switches channels.
【The real question】
Are you more worried that PPI will reignite inflation on the business side, or that employment and retail together will prove demand is falling?
$BTC $ETH #美国7月cpi与ppi数据本周出炉 #美联储 #inflation
Dragonfly Captain | A finance blogger who likes analyzing data and candlestick charts.
Not investment advice. Tonight’s PPI will be based on the official release, and FedWatch probabilities will change in real time.
【What CPI has already said】
(For the structure chart, see the cover and the chart in the body. Please cross-check against the blue line oscillation and the Fib dashed line on the right.)
The U.S. Bureau of Labor Statistics released July CPI. Overall, it rose 0.1% month over month and 3.4% year over year, versus the prior 3.5%. Core CPI rose 0.2% month over month and 2.5% year over year, versus the prior 2.6%. All the Dow Jones consensus expectations were met—classic “met expectations” pricing.
By components, energy fell again by about 1.5% month over month, after the big drop in June. Food and shelter each rose about 0.1%. Shelter still accounts for the largest share of the overall month-over-month increase, but it has moved away from the sharp drop in lodging costs, keeping housing pressure contained. Airline fares jumped about 2.2% month over month, while medical care rose about 0.4%. On a year-over-year basis, inflation remains above the Fed’s 2% target, but the monthly readings have not reignited the fire.
Market reaction was very direct. U.S. stock index futures were slightly warm, while Treasury yields fell. The CME FedWatch data cited by multiple sources shows the probability of a September rate hike was pushed further down to around the low 40% range, while the probability of staying put increased. This matches the “no need to rush” narrative that emerged after last week’s softer employment data.
【What to watch in tonight’s PPI】
At 8:30 p.m. Beijing time on August 13, the Department of Labor will release July PPI, with initial jobless claims also reported at the same time. Consensus is roughly 0.2% month over month for headline PPI, versus -0.3% prior. Year over year is expected to be about 4.9%, versus 5.5% prior. Core PPI is expected to rise 0.3% month over month, and 4.2% year over year.
Why look at PPI when CPI is already cool. The producer price components can feed into core PCE. Medical care, airline fares, and financial services are all on the watch list. CPI looks at what’s in consumers’ pockets, while PPI looks at whether costs on the business side are re-accelerating. If both sides cool in the same direction, it’s easier for the “stay put” stance in September to hold. If PPI is clearly “hot,” the rate-hike trade will come back.
On Friday, there will also be July retail sales; the market broadly expects a slight month-over-month increase. That will be the next shot at whether consumption is losing steam.
【Don’t forget the interest-rate backdrop】
Currently, the federal funds target range is 3.50% to 3.75%. The July FOMC held rates steady with a 9–3 vote, with three dissenting members arguing for a rate hike. Before the September meeting, markets will still go through another round of August employment and inflation data. So tonight’s data matters, but it’s not the final word.
【How to read it on the crypto side】
As of writing, BTC is around 63,835 and ETH around 1,893. Inflation met expectations and the urgency for hikes fell—typically friendly for risk assets. But prices had already traded in parts of the employment and CPI expectations in advance. Going forward, volatility is more likely to come from PPI coming in above expectations, or initial jobless claims unexpectedly strengthening or weakening.
Reading the tape can be broken into three tiers.
If year-over-year PPI falls below 5%, month over month doesn’t blow out, and initial jobless claims don’t deteriorate sharply—bullish observation can continue.
If year-over-year PPI is clearly higher than expected, or core month-over-month is too hot—rates trading returns, and crypto is more likely to face downward pressure first.
Numbers are neutral, but if Friday’s retail sales collapses, the narrative shifts from inflation to growth, and volatility switches channels.
【The real question】
Are you more worried that PPI will reignite inflation on the business side, or that employment and retail together will prove demand is falling?
$BTC $ETH #美国7月cpi与ppi数据本周出炉 #美联储 #inflation
Dragonfly Captain | A finance blogger who likes analyzing data and candlestick charts.
Not investment advice. Tonight’s PPI will be based on the official release, and FedWatch probabilities will change in real time.