š So CPI Wasnāt the Only Problemā¦ PPI Came in Even Hotter šµāš«
Inflation rose much more than expected, and honestly, the numbers were not pretty.
Final-demand PPI jumped 1.3% month over month, compared with only 0.5% expected. On a yearly basis, it climbed to 6.3%, well above the 5.4% forecast.
The biggest culprit? Energy.
Energy prices reportedly jumped 10.8% in just one month, while gasoline surged more than 20%. Core inflation was also stronger than expected, so this wasnāt only an energy story.
But hereās the strange partā¦
The market didnāt crash. š
Stocks actually held up pretty well, and Bitcoin also bounced back.
Why?
Most likely because CPI had already scared a lot of traders the day before. A big part of the panic selling had already happened, so when PPI came in hot, the market reaction was much calmer than people expected.
That doesnāt mean we should ignore inflation though.
If oil and energy prices stay high, inflation can remain stubborn and the Fed will have less reason to turn dovish.
But if geopolitical tensions cool down and oil starts falling again, inflation pressure could ease pretty quickly.
So for now, I wouldnāt overreact to one number.
The market is still nervous, but itās clearly not giving up that easily. Letās see what the next few days bring. š¼
$BTC
$XAU
$SOL
Inflation rose much more than expected, and honestly, the numbers were not pretty.
Final-demand PPI jumped 1.3% month over month, compared with only 0.5% expected. On a yearly basis, it climbed to 6.3%, well above the 5.4% forecast.
The biggest culprit? Energy.
Energy prices reportedly jumped 10.8% in just one month, while gasoline surged more than 20%. Core inflation was also stronger than expected, so this wasnāt only an energy story.
But hereās the strange partā¦
The market didnāt crash. š
Stocks actually held up pretty well, and Bitcoin also bounced back.
Why?
Most likely because CPI had already scared a lot of traders the day before. A big part of the panic selling had already happened, so when PPI came in hot, the market reaction was much calmer than people expected.
That doesnāt mean we should ignore inflation though.
If oil and energy prices stay high, inflation can remain stubborn and the Fed will have less reason to turn dovish.
But if geopolitical tensions cool down and oil starts falling again, inflation pressure could ease pretty quickly.
So for now, I wouldnāt overreact to one number.
The market is still nervous, but itās clearly not giving up that easily. Letās see what the next few days bring. š¼
$BTC
$XAU
$SOL