U.S. January inflation "high fever" persists, PPI exceeds expectations with a rebound, and rate cut expectations are suppressed

BlockBeats News, February 27 — The U.S. Bureau of Labor Statistics announced that in January, the Producer Price Index (PPI) increased by 0.5% month-over-month, higher than the market expectation of 0.3% and also above December 2025’s 0.4%. Year-over-year, it rose by 2.9%, surpassing the expected 2.6%. The data indicates that upstream inflation pressures remain resilient.

Excluding food, energy, and trade services, the core PPI rose by 0.3% month-over-month, in line with expectations, but increased to 3.4% year-over-year, higher than the market forecast of 3%. Structurally, energy prices have eased, with wholesale gasoline prices down 5.5% month-over-month and falling 15.7% year-over-year; service wholesale prices increased, and profit margins for retailers and wholesalers expanded, becoming the main driving factors.

Earlier, the January Consumer Price Index (CPI) was reported to have increased by 2.4% year-over-year, close to the Federal Reserve’s 2% target. However, the unexpectedly strong PPI reinforced concerns about persistent inflation, which may cause the Fed to remain cautious about rate cuts.

Following the data release, international spot gold prices slightly retreated from recent highs but then recovered some of the losses. Market analysts pointed out that certain components of the PPI (especially healthcare and financial services) will influence the PCE price index, which the Fed pays closer attention to. Future data performance will be an important reference for interest rate expectations.