Reply To: Traders Market Weekly: Rates, Debt and the Fed


January Producer Price Index (PPI) was up 0.7% month-over-month (consensus 0.4%) following an upwardly revised 0.2% decline (from -0.5%) in December.
Core-PPI, which excludes food and energy, was up 0.5% month-over-month (consensus 0.3%) following an upwardly revised 0.3% increase (from 0.1%) in December.
On a year-over-year basis, PPI was up 6.0%, versus 6.2% in December, and core-PPI was up 5.4%, versus 5.8% in December.

The key takeaway from the report for the market is that headline inflation was hotter than expected on a monthly basis. That will stoke worries about inflation pressures persisting at higher levels for longer than expected — and the Fed keeping rates higher for longer — even though there was improvement on a year-over-year basis.