While markets have never paid much attention to the PPI (producer price index) this time is different. Folks want to know–what are costs doing?
The PPI tomorrow morning is just a ‘warm up’ for the number folks have always paid attention to–the CPI (consumer price index), which will be released on Tuesday morning.
We can be certain of 1 thing–the Fed will be dissecting the reports–trying to find out if they can still call increases ‘transitory’. If the numbers are tame–coupled with last months weak jobs report you can be certain Powell will use the occasion to keep pushing out ‘tapering’. If both reports come in ‘hot’–not sure how Powell will frame them. We’ll see.