PPI data performance is quite impressive! Its annual rate not only shows a downward trend, but also falls below market expectations. It is worth noting that not only the annual rate is like this, but the monthly rate also declines, which is indeed remarkable. In contrast, CPI data shows a decline in the annual rate but an increase in the monthly rate, while PPI has already shown signs of deflation, and both core PPIs are also decreasing, which is very concerning.
Before the PPI data was released, CME's expectation for no interest rate cut in July was 63.3%. I just refreshed the data, and there has been no change for now. Theoretically, a decrease in PPI should increase the probability of the Federal Reserve cutting interest rates in July.
However, the Federal Reserve's expectations for inflation will be clearer only after tariffs are implemented. Although this inflation data is good, it is difficult to fundamentally change the Federal Reserve's inflation expectations. In comparison, the impact of retail data may be more critical.
The market originally expected retail data growth to be 0%, while the actual published result is 0.1%. Although the published value is less than the previous value, it has achieved positive growth. I observed that the BTC market sentiment is still quite good, yet there is no significant fluctuation in the U.S. stock market. We can continue to pay attention and observe in the future.
