Cool-ish PPI reading paves way for CPI report 

Analysts still caution investors not to take a cool reading as a sign for future rate cuts

article-image

Nataliia Maksymenko/Shutterstock modified by Blockworks

share


This is a segment from the Forward Guidance newsletter. To read full editions, subscribe.


Markets got a pre-CPI treat on Tuesday in the form of a mildly cool PPI reading. 

Producer prices in December rose 0.2%, down slightly from analysts’ projection of a 0.4% rise. Core PPI, which excludes food and energy, was in line with expectations and unchanged from November (+0.3%). 

The report generally sets the stage well for tomorrow’s more-closely-watched CPI reading, slated to be published at 8:30 am ET. Still, analysts caution investors not to take a cool reading as a sign for future rate cuts. 

“We’ve seen a stubbornness in inflation over the last few quarters, causing investors to wonder whether the Fed jumped the gun by cutting rates by 100 basis points in the second half of last year,” eToro US investment analyst Brett Kenwell said. “A strong monthly jobs report and a strong ISM services report didn’t help matters, although they do point to a strong economic foundation.” 

As a reminder, analysts are calling for headline CPI to come in at 2.9% annually, an increase from November’s 12-month 2.7% reading. Core CPI is expected to remain unchanged at 3.3% for the 12 months ended December. 

Looking ahead to March, today’s PPI did slightly increase odds of a 25bps interest rate cut. Fed funds futures are currently pricing in a 21.6% chance of such a cut, up from 19.4% a day ago.


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Upcoming Events

Brooklyn, NY

SUN - MON, JUN. 22 - 23, 2025

Blockworks and Cracked Labs are teaming up for the third installment of the Permissionless Hackathon, happening June 22–23, 2025 in Brooklyn, NY. This is a 36-hour IRL builder sprint where developers, designers, and creatives ship real projects solving real problems across […]

Industry City | Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Research

article-image

With the June FOMC meeting coming up, the Fed remains unlikely to cut interest rates. Is this the right move?

article-image

The crypto-optional shooter is expected to release on Steam in a few weeks

article-image

The new airdrop campaign reaches 50,000 users, setting the stage for Spark’s 10-year token distribution

article-image

GolfN’s CEO believes “everyone in crypto is golf-adjacent”