Inflation pressure continues! The U.S. October PPI rose more than expected, which may affect the Federal Reserve's pace of interest rate cuts

According to the Zhitong Finance APP, data released by the U.S. Bureau of Labor Statistics on Thursday showed that the U.S. Producer Price Index (PPI) rose 2.4% year-on-year in October, higher than the market expectation of 2.3%; it increased 0.2% month-on-month, in line with market expectations. Additionally, the core PPI in the U.S. rose 3.1% year-on-year in September, exceeding the market expectation of 3.0%; it increased 0.3% month-on-month, higher than the market expectation of 0.2%. In October, U.S. producer prices showed a rebound, a trend partly attributed to the rise in portfolio management and prices in other categories. Notably, these price changes are directly related to the inflation indicators that the Federal Reserve is closely monitoring. It is worth mentioning that this index was released shortly after the highly anticipated Consumer Price Index (CPI), which showed in a report released on Wednesday that inflation has remained strong for the third consecutive month. Although overall price pressures have eased this year, the recent lack of further downward trends suggests that Federal Reserve policymakers may slow the pace of interest rate cuts. Economists have delved into the PPI data to look for clues regarding the Federal Reserve's preferred inflation indicator—the Personal Consumption Expenditures Price Index (PCE). Among these, portfolio management fees, which are closely related to the stock market, rose 3.6%, reaching the highest point in six months. Additionally, airfares have shown a significant upward trend, with increases reaching a new high since the end of 2022. The report further noted that airfare prices in the healthcare category performed strongly. The PPI report also indicated that service costs rose by 0.3%, compared to an increase of 0.2% last month. Meanwhile, prices of goods excluding food and energy also saw a slight rebound from last month, with an increase of 0.3%. However, the decline in wholesale prices for food and energy has somewhat suppressed the overall increase in the PPI. In summary, the rebound in U.S. producer prices in October is the result of multiple factors, with the rise in portfolio management fees, airfare prices, and service costs playing a key role. At the same time, the decline in wholesale prices for food and energy has exerted a certain suppressive effect on the overall increase. These price changes not only reflect the current economic situation but also provide important reference points for the Federal Reserve's future policy-making