The Clap
The producer price index (PPI) increased by 0.3% in November, more than analysts’ expectations for an 0.2% increase, and 7.4% from a year before in November 2021.
What
Core PPI, which excludes food and energy prices, also saw an 0.4% increase this month, and 6.2% from a year before.
The larger-than-expected increase in the PPI sent a mixed signal to investors about the pace of inflation, sending the S&P 500 down 0.73%.
So What
The Fed has been aggressively hiking interest rates in order to combat inflation, and the PPI all but confirmed another interest rate hike.
Now What
Following the news, all eyes will be on the Fed’s decision regarding interest rates on Wednesday and whether the interest rate hikes will be of the same magnitude as the previous months or not.
