On Wednesday, March 15, the U.S. Department of Labor released data showing that U.S. retail sales fell 0.4% month-on-month in February, which was lower than the expected -0.3% and 3% from the previous value. Core retail sales fell 0.1% month-on-month, in line with expectations. Retail sales continued to slow. PPI in the United States fell, and the year-on-year growth rate of PPI in February fell from 6% to 4.6%, but lower than the expected 5.4%; the chain growth rate fell from 0.7% to -0.1%, which was also lower than expected; % fell to 4.4%, lower than expected; the core PPI was flat month-on-month.
The sharp slowdown in the data suggests that inflationary pressures appear to be fading amid aggressive rate hikes by the Federal Reserve.
Overall, inflation has eased from a 40-year high last summer. But prices are still rising too fast to satisfy the Fed, not to mention the fact that thousands of businesses and millions of households are still battling high inflation.
In particular, the Fed's task of curbing inflation has been complicated by the collapse of Silicon Valley banks. The Fed's carefully orchestrated cycle of rate hikes led to a run on the bank that eventually led to its collapse, raising concerns about the health of the U.S. financial system.
Combined with Tuesday's CPI data, the figures present a thorny conundrum for Fed officials considering whether to extend the rate hike cycle at next week's meeting.
What it means: The lower-than-expected PPI data will allow the Fed to slow down the pace of rate hikes slightly while balancing financial stability concerns.
However, Credit Suisse broke out a liquidity crisis. It is reported that Credit Suisse's asset scale is about $1.48 trillion; while Silicon Valley Bank's asset scale is only $209 billion, which is 7 times that of Silicon Valley Bank. Therefore, the European stock market fell sharply in the afternoon, which in turn affected the cryptocurrency to a certain extent, and the crisis still hangs over the sky.
Comment: Judging from the recent data released by the United States and the outbreak of the Silicon Valley Bank crisis, the Fed’s willingness to raise interest rates may be biased toward dovishness or stop raising interest rates. But that doesn't mean the crisis is gone. After all, there is still a "Sword of Dalix" hanging over the head of traditional finance.
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