The PPI rose to 1.6%, more than the 1.1% expected, so the rate cut could be a long time coming.
He Producer Price Index (IPP) of USA increased to 1.6% in February, exceeding expectations of 1.1% and putting the Federal Reserve (Fed) about a possible cut in the interest rate, in the midst of a rise in the cost of goods such as fuels and the food, which could stoke fears of a rebound.
Meanwhile, the inflation base of the PPI was 2%, exceeding expectations of 1.9%, so that both indicators resumed the upward trend, something that could influence the next decisions of the Fed, whose rate cut seems to be postponed until June.
The PPI for final demand rose 0.6% last month, after advancing an unrevised 0.3% in January, the U.S. Bureau of Labor Statistics reported Thursday. Work Department, with the forecast that it will remain at 0.3%.
The 1.2% increase in the prices of goods represented almost two thirds of the PPI advance and was driven by the energy products, which rose 4.4% after falling 1.1% in January.
The market expects the Fed to cut the rate in June
Despite the data on production prices and consumer spending published on Thursday, the bets of the financial markets maintain their forecasts on the start of cuts in the interest rates, which would be in June.
In their analyses, experts focus on the prices of futures contracts that are settled at the official rate of the US central bank.
Those responsible for the monetary politics of the Fed, who will meet next week, are waiting for data that will give them more confidence that inflation is heading towards its 2% objective, which would allow them to begin reducing the official rate.
With all this in mind, they are expected to keep the rate between 5.25% and 5.5%, the highest level in two decades, at least until their mid-June meeting.
Source: Ambito
