Reserve

Core

Rise

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<p class="has-drop-cap">A closely followed inflation measure, the producer price index (PPI), <a aria-label="soared 2.2% in September (opens in a new tab)" href="https://www.bls.gov/news.release/ppi.nr0.htm" target="_blank" rel="noopener noreferrer nofollow" class="deco-link">soared 2.2% in September</a> – the highest year-over-year increase since April. On the month, the index rose 0.5% last month, exceeding the consensus estimate of 0.3%.&nbsp;</p>
<h3 id="inflation-pressures-fueled-by-final-demand-goods">Inflation Pressures Fueled by Final Demand Goods</h3>
<p>The PPI index – a key inflation gauge that measures the growth of wholesale prices – rose by 0.5% in September, exceeding the Dow Jones projection of a 0.3% increase. However, the rise was lower than the 0.7% recorded in August.</p>
<p>Core PPI, which does not consider food and energy prices, climbed 0.3%, while economists were looking for a 0.2% jump.</p>
<p>Year-over-year, the headline PPI soared by 2.2%, marking the sharpest increase since April. The annual growth in wholesale prices was as low as 0.2% in June but accelerated rapidly in the following months.&nbsp;</p>
<p>According to the report, the persisting inflation pressures were mainly driven by the final demand goods prices, which surged 0.9% monthly. The bulk of the goods price increase came from gas costs, which rose 5.4%. Services advanced 0.3% in September.&nbsp;</p>
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<h3 id="stocks-rise-despite-higher-than-expected-ppi-print">Stocks Rise Despite Higher-Than-Expected PPI Print</h3>
<p>Although the jump in headline PPI was significant, the markets remained calm.&nbsp;</p>
<p>The S&amp;P 500 benchmark index rose 0.34% at the market open, with the Dow Jones Industrial Average (DJIA) witnessing a similar increase. Further, the Nasdaq composite was up 0.6% at publication.&nbsp;</p>
<p>Meanwhile, the 10-year Treasury yield fell slightly to 4.607, and the 30-year yield slipped to 4.754. Yields with long maturity dates have been sitting at multi-year highs recently as the Federal Reserve’s hawkishness <a href="https://tokenist.com/bonds-with-10-years-maturity-have-plunged-46-since-may-2020-as-rout-continues/" rel="noopener noreferrer nofollow" class="deco-link">continues to weigh on the bond market</a>.&nbsp;</p>
<p>Over the past few days, the Fed officials have hinted that there may be <a aria-label="no need for further interest rate hikes (opens in a new tab)" href="https://www.reuters.com/markets/us/feds-bostic-sees-no-more-us-rate-hikes-no-recession-2023-10-10/" target="_blank" rel="noopener noreferrer nofollow" class="deco-link">no need for further interest rate hikes</a> precisely because Treasury yields have risen substantially. This less hawkish stance helped ease investor fears, propelling stocks higher this week.&nbsp;</p>
<p>However, it <a href="https://tokenist.com/oil-drops-to-88-as-markets-brace-for-high-interest-rates-to-stay-longer/" rel="noopener noreferrer nofollow" class="deco-link">may be a while before the central bank cuts rates</a>, as <a href="https://tokenist.com/oil-prices-hit-10-month-high-us-inflation-higher-than-expected/" rel="noopener noreferrer nofollow" class="deco-link">inflation remains notably higher</a> than the 2% target. The Fed previously indicated it may take several years to reach this level.&nbsp;</p>
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<p><em><strong>When do you expect the Federal Reserve to begin cutting rates? Let us know in the comments below.&nbsp;</strong></em></p>
<p>The post <a rel="noopener noreferrer nofollow" href="https://tokenist.com/sep-wholesale-inflation-higher-than-estimated-up-2-2-annually/">Sep. Wholesale Inflation Higher than Estimated: Up 2.2% Annually</a> appeared first on <a rel="noopener noreferrer nofollow" href="https://tokenist.com">Tokenist</a>.</p>

Sep. Wholesale Inflation Higher than Estimated: Up 2.2% Annually

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