🚨 US producer inflation exploded suddenly… and the market is starting to fear a return to Fed tightening.
Yesterday's PPI data was shocking:
Monthly inflation jumped to 1.4% instead of the expected 0.5% 😳
Core inflation also surged to 1.0% compared to the expected 0.3%.
This means that price pressures are still very strong, especially with the continued rise in energy and oil prices.
While a large part of the jump came from airfares, which rose by +3%, the market quickly understood the message:
📌 The Fed can't easily talk about cutting interest rates right now.
That's why 10-year Treasury yields are approaching 4.50%, while 10-year inflation expectations have reached 2.5%.
The difference here is very important 👇
In 2025, rising yields were scaring the market with the prospect of a debt crisis, but now high yields are directly supporting the dollar because the reason is inflation and high interest rates.
At the same time, markets are awaiting Trump's visit to China, as any positive talk about trade or Chinese pressure on Iran could temporarily ease concerns and slightly weaken the dollar.
📌 My prediction:
As long as bond yields remain above 4.40% and inflation is high, the dollar will remain strong, and any decline will be limited for now.
$XAU
$BTC $USDC #dollar #Inflation #federalbank #Gold #oil