PPI Surprise Raises Inflation Risk — Crypto Faces Downside

PPI (Producer Price Index) measures price changes that producers receive for goods and services. The monthly PPI came in at +0.9% (vs. +0.2% expected) and the yearly PPI at +3.3% (vs. +2.5% expected), so producer costs are rising much faster than anticipated.

Higher producer inflation usually feeds into consumer inflation (CPI), and the Fed targets 2% inflation—these prints are well above that target. Given the surprise, the Fed is less likely to cut rates soon and may keep policy tighter for longer.

I see this as negative for risk assets, especially crypto: Bitcoin and altcoins reacted by falling, and I expect pressure to continue while inflation remains elevated and rate-cut expectations recede.