The surprise came from where it was least expected. The latest figures on production inflation in the United States had a chilling effect on the markets this Thursday. The July Producer Price Index (PPI) jumped by 0.9% in a month, while economists were betting on 0.2%, and rose to 3.3% over the year, well above expectations. As a result, hopes for a quick rate cut by the Fed have just taken a serious blow.
Le PPI de juillet surprend les marchés
In June, the monthly increase had turned into a stagnation with a 0% figure. This is a stark shock. Even the Core PPI, which excludes volatile prices of energy and food, soared by 0.9%, against 0% in June and only 0.2% expected. Over the year, it reaches 3.7% while the market was forecasting 2.9%. In other words, production inflation is settling in above the levels considered comfortable by the Fed.
Un chiffre qui change la donne
The cryptos did not delay in reacting. Bitcoin, which hit an all-time high above $124,000 overnight, fell below $118,000 after the publication. Ethereum lost nearly 5% to slide below $4,500. Altcoins that were leading the pack in recent days, such as Solana or XRP, also suffered heavy losses.
Risk aversion spread in a matter of minutes. Investors, already nervous, saw in these figures confirmation that the Fed will not ease monetary pressure as quickly as expected.
Taux de la Fed : la fête est finie ?
The market was still counting on a 100% probability of a rate cut in September. According to CME FedWatch tool, this number dropped to 96% after the report. While the rate cut is still widely anticipated, the message is clear: if inflation picks up, the Fed could delay and maintain higher rates for longer.
The labor market, on the other hand, is not showing any signs of easing. Weekly jobless claims stood at 224,000 for the week of August 9, slightly below the expected 228,000. Continuous claims remain steady at 1.95 million. A strong economy and accelerating inflation: an explosive mix for monetary policy.
Impact global : dollar et obligations montent
The tremor hasn’t only affected crypto. US stock index futures are down by 0.5%, the dollar is gaining strength, and the yield on the 10-year Treasury is up by five basis points to 4.25%.
In the crypto market, this report underscores a simple reality: as long as inflation persists, high rates weigh on risky assets. And for Bitcoin and the market as a whole, every US statistic can be enough to reverse the trend in a matter of hours.
