Wall Street closes at a record for the first time since end of January
Investing.com - The growth in U.S. producer prices slowed substantially in October on a monthly basis, and grew only marginally in November, but a hefty rise in the widely-watched “core” figure added to the uncertainty surrounding the U.S. Federal Reserve’s monetary policy this year.
The producer price index for final demand rose 0.1% on the month in October, after rising by a revised 0.6% in September, the Labor Department’s Bureau of Labor Statistics said.
The bureau also released the November figures at the same time, and these showed monthly growth of 0.2%
In the 12 months through November, the PPI increased 3.0% after climbing 2.8% in October.
That said, the widely-watched ‘core’ PPI figure, which excludes volatile food and energy prices, grew a substantial 0.7% on the month in October, and 0.2% in November on a monthly basis.
For the 12 months ended in November, prices for final demand less foods, energy, and trade services climbed 3.5%, the largest 12-month increase since rising 3.5% in March.
U.S. consumer price index data released on Tuesday came in below expectations. The core CPI rose 0.2% in December and 2.6% year-on-year, below forecasts, reinforcing bets for future rate reductions.
Markets had priced in roughly two rate cuts in 2026.
"Two Fed rate cuts seem perfectly achievable with the risks skewed towards a third due to the cooling jobs story," ING analysts said in a recent note.
The Federal Reserve cut interest rates at each of the last three meetings of 2025, but officials indicated that the next reduction may be harder to come by, suggesting the likelihood of only one more easing in 2026.