US PPI Hits 3% Year-Over-Year, Sparks Concerns Over Fed’s Hawkish Move
The latest data shows that U.S. PPI rose 3% year-on-year, higher than October’s 2.4% and higher than economists’ forecast of 2.6%. This marks the highest year-over-year growth since February 2023. Thursday’s producer price index (PPI) data, released a day after November’s consumer price index (CPI), showed core inflation rose 3.3% for the fourth consecutive month. The higher-than-expected data also raised concerns that the Federal Reserve could take hawkish action next week. In addition, inflation has not fallen back quickly to the Fed’s 2% target, prompting investors to expect the Fed to cut interest rates in 2025 by less than initially expected.
