Recently, the United States released the Producer Price Index (PPI) data for July, causing market fluctuations. The annual PPI rate reached 3.3%, significantly higher than the expected 2.5% and the previous value of 2.3%. This data suggests a possible significant rebound in inflation for August, while also dropping market expectations for a Federal Reserve interest rate cut.



PPI, as an important component of inflation, has a significant impact on the Federal Reserve's decisions. The core Personal Consumption Expenditures (PCE) index, which the Federal Reserve closely monitors, includes the core Consumer Price Index (CPI) and core PPI in its calculation formula. Therefore, a significant rise in PPI will undoubtedly attract the high attention of decision-makers.

Despite the market still expecting that the Federal Reserve may drop interest rates, trading sentiment has clearly shifted. Previously, the market generally believed that regardless of the economic data, a rate drop would be inevitable. However, if inflation rises significantly, Federal Reserve officials who support a rate drop may face questions about the fairness of their stance.

It is worth noting that the primary responsibility of the Federal Reserve is to maintain the stability of the U.S. economy and emphasize its independence. Hastily lowering interest rates in the context of rapidly rising inflation could provide critics with reasons to oppose. From this perspective, this PPI data may serve as a strong argument in support of keeping interest rates unchanged.

It should be added that this data comes from the U.S. Bureau of Labor Statistics, which is currently led by an acting director, and the newly nominated candidate for director is still awaiting Senate approval.

Although there is still some time before the Federal Reserve's monetary policy meeting in September, during which a series of economic data will be released, this unexpectedly high PPI data undoubtedly brings new uncertainties to the market, and investors need to closely monitor the subsequent developments.
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ApeWithNoChainvip
· 08-14 17:50
Cut Loss market is coming.
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LeverageAddictvip
· 08-14 17:49
Another rise? I want to cry but have no tears.
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DecentralizeMevip
· 08-14 17:36
Jumped back and forth again.
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PoetryOnChainvip
· 08-14 17:31
I remember the big pump back in the day.
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CrossChainBreathervip
· 08-14 17:29
Let's have a try, the Intrerest Rate war is endless.
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