Producer Inflation Jumps More Than Expected: Is The Fed's Rate-Cut Plan Now In Trouble?

The Producer Price Index delivered an upside surprise across the board in January, reviving concerns that price pressures remain sticky and complicating the Federal Reserve's rate-cut timeline.
The Bureau of Labor Statistics reported Friday that headline producer prices rose 0.5% month over month in January, above the 0.3% consensus forecast and accelerating from December’s 0.4% pace.
On a year-over-year basis, the PPI increased 2.9%, well above expectations of 2.6%, though slightly below December's 3.0%.
Core PPI, which excludes food and energy, jumped 0.8% in January — the highest print since July 2025 — sharply outpacing expectations of 0.3%.
On an annual basis, core producer prices rose 3.6%, again above the 3.0% forecast and up from 3.3% previously.
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