😂 So CPI Wasn’t the Only Problem… PPI Came in Even Hotter 😵💫
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 wasn’t only an energy story.
But here’s the strange part…
The market didn’t crash. 😂
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 doesn’t 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 wouldn’t overreact to one number.
The market is still nervous, but it’s clearly not giving up that easily. Let’s see what the next few days bring. 🐼
$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 wasn’t only an energy story.
But here’s the strange part…
The market didn’t crash. 😂
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 doesn’t 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 wouldn’t overreact to one number.
The market is still nervous, but it’s clearly not giving up that easily. Let’s see what the next few days bring. 🐼
$BTC
$XAU
$SOL