Crisis: US Interest Expectations See Notable Changes After Inflation Data By Investing.com

Investing.com – Bank-linked futures fell after data showed wholesale prices rose slightly more than expected last month, though not enough to suggest that traders have lost confidence that the US central bank will cut short-term borrowing costs again next month.

After the data, which showed producer prices excluding food and energy rose 3.1% in the 12 months through October, traders priced around 75% for a seasonal cut in interest rates in December, compared to over 80% before the data. . They also slightly reduced their expectations for interest rate cuts next year, including no more than two additional quarterly increases for all of 2025.

The U.S. core producer and primary producer price index rose last month by more than expected annually, as this comes one day after the release of consumer price index data. who recorded percentages in line with expectations.

The US Labor Department – which tracks inflation before it reaches consumers – rose 0.2% in October, which was what experts had expected, while the previous reading recorded a rise of 0.1% . However, prices rose 2.4% in October, exceeding experts’ expectations of 2.3%, and higher than the previous reading, which was revised up to 1.9%.

With the exception of food and energy prices, which tend to vary from month to month, by 0.3% per month, that is what experts expected, and the previous reading had registered an increase of 0.2%. Annually, producer prices rose 3.1%, higher than expected 3%, and higher than the previous reading of 2.9% after revision.

The wholesale inflation data follows the closely watched Consumer Price Index, which showed on Wednesday that core inflation remained flat for a third month. While price pressures have largely eased this year, the recent lack of progress suggests Fed policymakers will slow the pace of interest rate cuts.

Economists analyze PPI data for the sectors that feed into the Fed’s favorite inflation measure – the Personal Consumption Price Index.