Two reports. Two days. One very clear message for the\u00a0USD.<\/p>\n
CPI (May 13):<\/strong> Headline inflation hit 3.8% year-on-year in April\u200a\u2014\u200athe highest since May 2023\u200a\u2014\u200aup from 3.3% in March. Energy surged 17.9% annually, gasoline +28.4%, shelter +0.6% for the month. Core CPI came in at 2.8% YoY, above the 2.7% forecast. Real wages fell 0.5% for the month. For the first time in three years, paychecks are losing ground to\u00a0prices.<\/p>\n PPI (May 14):<\/strong> Producer prices jumped 1.4% MoM\u200a\u2014\u200anearly 3x the 0.5% consensus\u200a\u2014\u200aand 6.0% YoY, the highest annual reading since December 2022. Services drove nearly 60% of the increase, its biggest monthly gain since March 2022. That is the detail that worries the Fed most: services inflation is sticky.\u00a0\ud83d\udd25<\/p>\n So which one moves the dollar\u00a0more?<\/strong><\/p>\n CPI triggers the immediate reaction\u200a\u2014\u200ait directly shapes rate bets. PPI is the leading signal: when producer costs run at 6% while consumer prices sit at 3.8%, the gap is unsustainable. Either margins get crushed or costs pass through to consumers\u200a\u2014\u200akeeping future CPI hot. Right now, both reports are pointing the same direction. \ud83d\udcc8<\/p>\n The market reaction this week:<\/strong> The Dollar Index climbed to 98.26 after the PPI print. The 2-year Treasury yield rose to 4.02%. Rate hike odds for December 2026 jumped to ~39%, with the Fed holding its benchmark rate at 3.5%-3.75% and cuts essentially priced out for the rest of the\u00a0year.<\/p>\n The backdrop:<\/strong> The US-Iran war has sent gasoline above $4.50\/gallon nationally\u200a\u2014\u200aup ~50% since the conflict began in late February. Tariffs are amplifying pressure at the producer level. The Fed is caught between a resilient labor market, sticky core inflation, and a geopolitical energy shock it cannot control. Incoming Fed Chair Kevin Warsh takes over Friday\u200a\u2014\u200asquaring his dovish lean with 3.8% CPI won\u2019t be easy.\u00a0\u26a1<\/p>\n Bottom line:<\/strong> Watch the CPI-PPI spread. When producer prices consistently outrun consumer prices, the pipeline stays pressured, rate cuts stay off the table, and the dollar stays\u00a0bid.<\/p>\n Trade the inflation story with precision. \ud83d\udc49 https:\/\/my.nordfx.com\/en\/registration?utm_source=social&utm_medium=post&utm_campaign=nordfx<\/a><\/p>\n Trading forex and CFDs involves significant risk of\u00a0loss.<\/em><\/p>\n NordFX: CPI vs PPI: Which Inflation Report Matters More for the Dollar? \ud83d\udcca<\/a> was originally published in Coinmonks<\/a> on Medium, where people are continuing the conversation by highlighting and responding to this story.<\/p>","protected":false},"excerpt":{"rendered":" Two reports. Two days. One very clear message for the\u00a0USD. CPI (May 13): Headline inflation hit 3.8% year-on-year in April\u200a\u2014\u200athe highest since May 2023\u200a\u2014\u200aup from 3.3% in March. Energy surged 17.9% annually, gasoline +28.4%, shelter +0.6% for the month. Core CPI came in at 2.8% YoY, above the 2.7% forecast. Real wages fell 0.5% for […]<\/p>\n","protected":false},"author":0,"featured_media":166257,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"class_list":["post-166256","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-interesting"],"_links":{"self":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/166256"}],"collection":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=166256"}],"version-history":[{"count":0,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/166256\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/media\/166257"}],"wp:attachment":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=166256"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=166256"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=166256"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}