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US PPI Inflation Eases to 2.2%, Bitcoin Price Rally Imminent? – Crypto News

Published

2 years ago

June 13, 2024

Dripp

The latest U.S. Producer Price Index (PPI) index data showed that the inflation has cooled to -0.2% in May, while the market was expecting a surge of 0.1%. Notably, the cooling inflation data has fueled optimism in the market over a potential dovish stance by the Federal Reserve.

In addition, the latest U.S. CPI data also boosted market confidence. Despite that, the latest remark from Fed Chair Jerome Powell appears to dampen hope, as he signals only one rate cut in 2024 as the inflation still remains at the top of their 2% target range.

US PPI Inflation Drops To Lowest Level Since October 2023

The latest data by the Bureau of Labor Statistics showed that the U.S. PPI inflation fell 0.2% in May after soaring 0.5% in the prior month. Notably, this marks the largest drop since October last year. On an unadjusted basis, the inflation cooled to 2.2% in May as compared to 2.3% in the prior month. Besides, the market was expecting the annual PPI inflation to come in at 2.5%.

On the other hand, the Core PPI, excluding the food, energy, and trade services, remains unchanged from the prior month. In addition, the core PPI annual rate in May eased to 2.3% as compared to the 2.4% figure noted in April. The market was also expecting the Core PPI annual rate to come in at 2.4%.

Although the latest U.S. PPI inflation data signals that the inflation is cooling, it appears that the market is taking a cautious approach as it still stays above the Fed’s target range. Despite the Fed’s dot plot still indicating two rate cuts this year, the recent Fed Chair’s comment appeared to have weighed on the investors’ sentiment.

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