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US producer prices rose modestly in December, but that is unlikely to change the view that the Federal Reserve will not cut interest rates again before the second half of this year amid a resilient labor market.
producer price Index The Labor Department’s Bureau of Labor Statistics said Tuesday that final demand rose 0.2% last month after an unchanged 0.4% advance in November. Economists polled by Reuters had expected the PPI to climb 0.3%.
In the 12 months to December, PPI rose 3.3% after rising 3.0% in November. The year-over-year rate jump reflects last year’s low prices, particularly for energy products, which have been left out of the calculations.
Fed minutes show policymakers adding to inflation uncertainty from immigration, tariff changes
A customer shopping at a grocery store in Chicago, Illinois. (Scott Olson/Getty Images/Getty Images)
This report comes after last week’s news Sharp rise in non-farm payrolls The unemployment rate fell further in December, leading economists to expect the US central bank to keep rates unchanged until June.
US economy added 256 thousand jobs in December, more than expected
Workers build homes in Lillington, North Carolina on June 15, 2023. (Photographer: Allison Joyce/Bloomberg via Getty Images/Getty Images)
at least one wall street organization, Bank of America Securities now believes the Fed’s easing cycle is over. Goldman Sachs now expects two cuts in June and December this year, down from three earlier.
The central bank kicked off its easing cycle in September and cut its benchmark overnight interest rate by 100 basis points to the current 4.50%-4.75% range.
Federal Reserve Chairman Jerome Powell during a press conference after the Federal Open Market Committee (FOMC) meeting on Thursday, November 7, 2024 in Washington, DC. (Ting Shen/Bloomberg via Getty Images/Getty Images)
The last cut came in December when policymakers projected two rate cuts this year instead of the four forecast in September.
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To control inflation, the policy rate was increased by 5.25 percentage points in 2022 and 2023. Fears are increasing due to promises newly elected president donald trump Imposing or massively increasing tariffs on imports and deporting millions of undocumented immigrants could increase inflation. This was evident in the rise in consumers’ inflation expectations in January.
