To The Moon

From investing 

U.S. NOVEMBER CORE PPI INFLATION RISES 6.2% Y/Y; EST. 5.9%; PREV. 6.8%

taken from investing website

What could be the implications of a higher than expected PPI? 

Producer Price Index (PPI) precedes Consumer Price Index (CPI) as it is the inflationary cost impact faced by the producer during their production.

These inflation are likely passed on to the consumer pending on the price inelasticity of the goods.

This can imply that the inflation can continue its climb, thus, the Fed can remain hawkish with this news. The next important data is CPI next week before the Fed concludes their last rate hike for 2022.

While the market expects a Fed pivot with a 50 basis points increase but we should not be surprised by a 75 basis points hike. Should the Fed feels that the inflation is heightened, they can have the option to remain hawkish.

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