Markets brace after PPI jump
U.S. Producer Price Index climbed 0.7%, and traders are bracing for fresh global interest-rate moves as central banks react to energy-driven inflation shocks. The picture is mixed—Europe is warning on inflation and the Bank of England held rates, while Brazil cut rates for the first time since 2024—leaving markets to price divergent central-bank paths. (reuters.com) (riotimesonline.com)
The BLS said the index for final demand less foods, energy and trade services rose 0.5% in February and was up 3.5% over the past 12 months — the tenth consecutive monthly gain for that core pipeline measure. (bls.gov 1) (bls.gov 2) Final‑demand goods jumped 1.1% while final‑demand services rose 0.5% in February, with food prices up 2.4% and energy prices up 2.3% month‑over‑month. (bls.gov) Upstream pressures were broad: processed goods for intermediate demand gained 1.6%, unprocessed goods rose 3.1%, diesel fuel spiked 13.9% and crude petroleum climbed 4.7% in the month. (bls.gov) Short‑term US Treasury yields moved higher as investors re‑priced the odds on policy, with the 2‑year around 3.9% and the 10‑year trading near 4.33% after the data. (tradingeconomics.com) Risk assets reacted: the Dow closed down about 768.11 points (‑1.63%) at 46,225.15, the S&P 500 fell 1.36% to 6,624.70 and the Nasdaq ended at 22,152.42 on the day the Fed held rates. (cnbc.com) Policy paths are diverging: the Bank of England’s MPC voted 9‑0 to keep Bank Rate at 3.75%, the ECB left its three key rates unchanged at 2% while warning the Iran conflict could have a “material impact” on near‑term inflation, and Brazil’s Copom cut the Selic by 25bp to 14.75%. (money.usnews.com) (ecb.europa.eu) (bloomberg.com) (money.usnews.com) Futures now imply a much gentler Fed glide‑path than a month ago, with market‑implied fed‑funds curves showing early‑2027 rates near 3.6% and only a modest decline through late 2026. (streetstats.finance)
