The Fed is gearing up to hike rates faster than expected

Discussion in 'News Feeds' started by Wolf Richter, Jul 12, 2018.

  1. Wolf Richter

    Wolf Richter Guest

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    • The producer price index picked up by 3.4% from a year ago in June.
    • This data will work its way into consumer price inflation and add to it.
    • This has very hawkish implications for the Federal Reserve and interest rates.

    “In June, most of the rise in the index for final demand is attributable to a 0.4-percent advance in prices for final demand services,” said the Bureau of Labor Statistics in the release of its Producer Price Index data. The PPI and its numerous sub-indices measure inflation further up in the pipeline before it filters through to consumer prices.

    Services account for 65.3% (“relative importance”) of the PPI. Energy prices soared, but they account for only 5.6% of the PPI. In the overall picture, services matter the most.
    See the rest of the story at Business Insider
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