US February PPI final demand 4.6% YoY versus 5.4% YoY expected

• Prior PPI 6.0% (was expodus4ecting 5.4%) revised it to 5.7%
• PPI MoM -0.1% versus 0.3% expected (0.7% prior revised to 0.3% - was expecting at the time 0.4%))
• PPI Ex food energy YoY 4.4% vs 5.2% expected (prior 5.4%)
• PPI Ex food and energy MoM 0.0% vs 0.4% expected (prior 0.5% revised to 0.1% - was expecting 0.1%)
• PPI free-trade -0.8%
• transportation and warehousing down -1.1%

The PPI data is much cooler than expected. Moreover the prior months will revised lower with the year on year down to 5.7% from 6.0%. The high watermark for PPI was 11.3% in June 2022.

Lower producer prices is potentially good news for inflation Inflation Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Read this Term down the road if producers pass on the declining prices to consumers.

The two year yield is now down around -30 basis points and back below the 4% level at 3.918%. The 10 year yield is down -15 basis points at 3.484% as a result of the weaker retail sales and PPI data.

Looking at the Fed funds futures for January 2024 it now implies a 3.655% rate. That rate was at 3.94% is earlier in the New York session. The chance for a no change in policy is up to 45% at the March meeting up from 35% chance at the start of the New York session