The latest PPI data shows a mixed picture for inflation trends:
🔹 Headline vs. Core Inflation (YoY)
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Headline PPI cooled to 2.6% YoY in August, down from 3.1% in July.
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Core PPI (ex-food, energy, trade) remains stickier at 2.8% YoY, highlighting persistent underlying inflation pressures.
🔹 Goods vs. Services (MoM)
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Goods prices remain highly volatile, with energy driving sharp swings earlier in 2025.
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Services inflation is steadier, but continues to trend positive, underscoring why disinflation is proving slow.
⚖️ What this means:
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Energy shocks are fading, but services and core inflation remain above the Fed’s 2% target.
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The Fed is likely cautious about cutting rates too quickly, as the risk of sticky inflation lingers even while headline numbers soften.
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A “soft landing” is still possible, but progress toward 2% inflation is uneven.
📈 See charts below for the divergence:
1️⃣ Headline vs Core PPI (YoY)
2️⃣ Goods vs Services PPI (MoM)
👉 How do you see this playing out? Is sticky services inflation enough to keep rates higher for longer?
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