Strong PPI pushing Fed to do more
After consumer prices, US producer prices delivered another hawkish surprise. PPI rose by 0.7% in January, impressively stronger than the expected +0.4%. The annual price growth rate slowed from 6.5% to 6.0%, against expectations of 5.4%.
It is worth disregarding the slowdown in the annual inflation rate, as it is due to the high base effect of the previous year, while the monthly increase remains above the historical average.
Producer prices are a couple of months ahead of consumer prices, so today's release is a crucial hawkish signal for the Fed to continue raising rates without letting inflation expectations hang in the balance.
Aside from high inflation, the labour market also needs more reasons to take a breather. Initial jobless claims remained below 200k for the fifth week in a row, complementing the 3% rise in retail sales in January.
Overall, this mix of data suggests that the economy is in good shape. Still, it now risks triggering a reassessment of the monetary policy outlook, which is harmful to the markets.
The FxPro Expert Analyst Team
Gold Edges Higher as Dollar Weakens Ahead of US Midterm Results
Gold/Silver & Gold/Platinum Ratios: Deconstructing the Metals Sell-Off Divergence
GBPUSD Edges Towards 1.3463 as Traders Brace for the Bank of England Decision
Weak NZ Jobs Data Keeps NZDUSD Under Pressure
Gold buying by central banks has hit its highest rate since 2024.
Daily Technical Analysis: Gold Reclaims $3,900 After Hitting Its Lowest Level Since October 2025
Daily Fundamental Analysis: Wall Street Starts November on a Cautious Note Ahead of US Midterm Elections
