Inflation came in much higher than expected, and honestly, the numbers aren’t pretty.
Final demand PPI surged 1.3% month over month, while the forecast was just 0.5%. On a yearly basis, the index rose to 6.3%, well above the 5.4% forecast.
The biggest culprit? Energy.
Energy prices reportedly surged 10.8% in just one month, while gasoline prices climbed more than 20%. Core inflation also came in hotter than expected, so this isn’t just an energy story.
But here’s the strange part…
The market didn’t crash. 😂
Stocks actually held up pretty well, and Bitcoin bounced back, too.
Why?
Most likely because CPI had already spooked a lot of traders the day before. Much of the panic selling had already happened, so when PPI came in hotter than expected, the market’s reaction was a lot calmer than people thought it would be.
But that doesn’t mean we should ignore inflation.
If oil and energy prices remain high, inflation could stay stubborn, giving the Fed less reason to shift to a dovish stance.
But if geopolitical tensions ease and oil prices start falling again, inflationary pressure could cool off fairly quickly.
So for now, I wouldn’t overreact to a single number.
The market is still nervous, but clearly, it’s not ready to give up that easily. Let’s see what the next few days bring. 🐼
$BTC
$XAU
Final demand PPI surged 1.3% month over month, while the forecast was just 0.5%. On a yearly basis, the index rose to 6.3%, well above the 5.4% forecast.
The biggest culprit? Energy.
Energy prices reportedly surged 10.8% in just one month, while gasoline prices climbed more than 20%. Core inflation also came in hotter than expected, so this isn’t just an energy story.
But here’s the strange part…
The market didn’t crash. 😂
Stocks actually held up pretty well, and Bitcoin bounced back, too.
Why?
Most likely because CPI had already spooked a lot of traders the day before. Much of the panic selling had already happened, so when PPI came in hotter than expected, the market’s reaction was a lot calmer than people thought it would be.
But that doesn’t mean we should ignore inflation.
If oil and energy prices remain high, inflation could stay stubborn, giving the Fed less reason to shift to a dovish stance.
But if geopolitical tensions ease and oil prices start falling again, inflationary pressure could cool off fairly quickly.
So for now, I wouldn’t overreact to a single number.
The market is still nervous, but clearly, it’s not ready to give up that easily. Let’s see what the next few days bring. 🐼
$BTC
$XAU