U.S. March PPI, Contrary to expectations, fell 0.4%...Inflation easing expectations↑

March US PPI Data (Source: BLS)

The March US Producer Price Index (PPI) fell by 0.4% compared to the previous month, far below market expectations.

On the 11th (local time), the US Department of Labor announced that March PPI recorded -0.4% compared to the previous month. This figure significantly underperformed the initial market expectation of a 0.2% increase, indicating a decrease in price pressure at the production stage.

PPI is a leading indicator that is reflected in the Consumer Price Index (CPI) with a certain time lag, and this announcement is evaluated to raise expectations of easing inflation and could affect the Federal Reserve (Fed)'s monetary policy direction.

The market's expectations surrounding rate cuts can revive, creating a favorable environment for risky assets such as stocks and cryptocurrencies overall.

In particular, it is noteworthy whether the Fed, which has recently maintained a rate-hold stance, can give an easing policy signal through this price data.