Key inflation in the US decreased, but it’s still high

As the Bureau of Labor Statistics informs, in November, the PPI grew by 7.4% compared with the previous year. This is less than the October increase of 8.1%.

After the publication of the report, US stocks fell as economists were waiting for prices to rise by only 7.2%. Better-than-expected inflation figures caused fears about whether the Fed will slow down the growth of rates.

Nevertheless, futures for the Fed funds rate still have a chance to increase by 0.5%. It can happen at the meeting on December 14.

According to PNC senior economist Kurt Rankin, inflation moves in the right direction, albeit quite slowly. The Fed will consistently tighten the policy until inflation shows a clear downward trend.

Independent’s Top Investment Officer for Chris Zaccarelli declares that essential data on the PPI will appear on Tuesday. It is more important than the actual data. However, any signs of price growth and stable inflation are undesirable for markets.