Tonight’s PPI test isn’t really about whether the number is hot or cool. It’s about whether 0.3% becomes the Fed’s rule of thumb.
The line Fed Governor Waller drew on Tuesday was 0.3% month over month for core CPI. Wednesday’s release came in at exactly 0.3%—right on the line—and the option of a 50-basis-point rate hike in December is now on the table.
A week ago, markets hadn’t fully priced in even 50bp of cumulative hikes over the current cycle. Now expectations have risen to 75bp; the 2-year Treasury yield jumped 39bp in four trading days, its biggest move since June 2022.
Tonight’s PPI at 21:30 is expected to show core prices up 0.3% month over month too—essentially the same test all over again. CME data show an 85.5% chance of a 25bp hike in December and a 14.5% chance of 50bp; a week ago, the odds of 50bp were still 0%.
And the Fed isn’t united internally: New York Fed President Williams says rates still need to rise, while Cleveland Fed President Hammack argues for taking it slowly.
$BTC is now around $69,292, right between the two 200-week moving averages: the simple moving average at $67,879 is below, while the EMA at $69,555 is overhead. This week, it’s also on track for a sixth consecutive weekly decline.
My take: What the market is trading now isn’t PPI itself, but whether a number an official casually drew a line at will become the market’s anchor. A Reuters column has already made the point: 0.296% and 0.246% differ by just five-hundredths of a percentage point, yet their implications for pricing are worlds apart.
The key: if core PPI is ≥0.3% month over month, the odds of a 50bp hike could jump again, and $67,879 beneath $BTC will be put to the test. Below 0.3%, markets may breathe easier, but a 25bp hike is already all but certain, with another hike in January highly likely; any rebound would be technical.
What to watch next: core PPI month over month at 21:30, whether the odds of 50bp change, and whether the weekly close on Sunday can get back above $69,555.
Do you think the Fed should let a 0.3% figure decide between a 25bp and a 50bp hike? Or is this kind of “drawing-a-line” communication itself the problem?
$BTC #PPI #美联储 #RateHike
The above is for market information only and does not constitute investment advice.
The line Fed Governor Waller drew on Tuesday was 0.3% month over month for core CPI. Wednesday’s release came in at exactly 0.3%—right on the line—and the option of a 50-basis-point rate hike in December is now on the table.
A week ago, markets hadn’t fully priced in even 50bp of cumulative hikes over the current cycle. Now expectations have risen to 75bp; the 2-year Treasury yield jumped 39bp in four trading days, its biggest move since June 2022.
Tonight’s PPI at 21:30 is expected to show core prices up 0.3% month over month too—essentially the same test all over again. CME data show an 85.5% chance of a 25bp hike in December and a 14.5% chance of 50bp; a week ago, the odds of 50bp were still 0%.
And the Fed isn’t united internally: New York Fed President Williams says rates still need to rise, while Cleveland Fed President Hammack argues for taking it slowly.
$BTC is now around $69,292, right between the two 200-week moving averages: the simple moving average at $67,879 is below, while the EMA at $69,555 is overhead. This week, it’s also on track for a sixth consecutive weekly decline.
My take: What the market is trading now isn’t PPI itself, but whether a number an official casually drew a line at will become the market’s anchor. A Reuters column has already made the point: 0.296% and 0.246% differ by just five-hundredths of a percentage point, yet their implications for pricing are worlds apart.
The key: if core PPI is ≥0.3% month over month, the odds of a 50bp hike could jump again, and $67,879 beneath $BTC will be put to the test. Below 0.3%, markets may breathe easier, but a 25bp hike is already all but certain, with another hike in January highly likely; any rebound would be technical.
What to watch next: core PPI month over month at 21:30, whether the odds of 50bp change, and whether the weekly close on Sunday can get back above $69,555.
Do you think the Fed should let a 0.3% figure decide between a 25bp and a 50bp hike? Or is this kind of “drawing-a-line” communication itself the problem?
$BTC #PPI #美联储 #RateHike
The above is for market information only and does not constitute investment advice.