1. Data shock: PPI explosion caused market turbulence
Key data: U.S. July PPI soared 0.9% month-on-month (a three-year high), up to 3.3% year-on-year, far exceeding the expected 2.5%.
Immediate reaction: The crypto market plummeted - Bitcoin fell from $124,500 to $117,156, and Ethereum dropped from $4,790 to $4,451.
Comparison to previous situation: The CPI slightly below expectations on Tuesday had ignited market enthusiasm, leading to optimistic expectations of a 50bp rate cut in September, but the narrative has now reversed.
2. Why is PPI so critical?
Indicator significance: As an upstream producer price index, PPI is an 'early signal' of inflation, and its increase will gradually transmit to the consumer end (CPI).
Highlights this time: Service PPI rose 1.1% month-on-month (the largest since March 2022), and wholesale profit margins for machinery and equipment jumped 2%, becoming a major driver.
Future risks: The tariff costs previously absorbed by companies are gradually being passed on, inflation may gently rebound in the second half of the year, posing challenges for the Fed.
3. Interest rate cut expectations cool significantly
4. Current state of the crypto market: Short-term recovery, hidden concerns remain
Current performance: On August 15, Bitcoin and Ethereum slightly rebounded during the day, with some investors buying the dip.
Nature of the rebound: More of a technical recovery after overselling rather than a signal of trend reversal.
Core risk: Macroeconomic uncertainty remains, and if subsequent data continues to be strong, the pace of interest rate cuts may come under pressure again.
5. Key observation points for the future (as of September Fed meeting)
Inflation data: CPI, PPI, core PCE (the most closely watched indicator by the Fed)
Employment data: Non-farm payroll report, initial jobless claims
Economic signals: Retail sales, ISM manufacturing/services PMI
6. Recommendations for investors
Avoid unilateral bets on interest rate cut policies, and be cautious of the volatility caused by data fluctuations.
Focus on the Fed meeting on September 16-17, and track the key data mentioned above before then.
Core assets (Bitcoin, Ethereum) may experience short-term range fluctuations; need to be wary of emotional reversals.
In short, PPI data acted like a cold splash of water, waking the market from its excessive fantasies about easing policies. The subsequent trend of the crypto market will be dominated by the chain reaction of 'data - policy expectations - capital flow', and volatility may remain high.
Disclaimer: The content of this article is for reference only and does not constitute any investment advice. Investors should consider their own risk tolerance and investment goals, and approach cryptocurrency investments rationally, avoiding blind following.
