🔥 “The secret behind the PPI: the key that can skyrocket or sink the crypto market”📈📉#
Producer Price Index or Producer Price Index.
In short:
📊 Measures how much, on average, the prices that producers receive for their goods and services change before they reach the final consumer.
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How it works
Who calculates it: In the U.S., it is published by the Bureau of Labor Statistics (BLS) each month.
What it includes: Prices of raw materials, intermediate goods, and finished products sold by producers.
What it is NOT: It does not measure the price that the consumer pays directly (that is done by the CPI or Consumer Price Index).
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Why it matters for cryptocurrencies
1. Early inflation: If the PPI rises, it means that production costs are increasing. This usually translates to the CPI (consumer inflation) later.
2. Impact on interest rates: Higher inflation may lead the Federal Reserve to raise or keep rates high. High rates → less appetite for risk assets (like BTC, ETH, etc.).
3. Immediate market reaction: Investors adjust positions quickly, causing volatility in crypto and stock markets.
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💡 Simple example:
If it cost $100 to make a cellphone and now it costs $110 for the producer, the PPI rises. Eventually, that extra cost reaches the consumer… and monetary policy.
