Dow falls 305 points, PPI disappointment, expect CPI next week

industry averageDow It fell 305.02 points or 0.9% to close at 33,476.46 points.

S&P 500 index It fell 0.73% to close at 3,934.38 points.

NASDAQ index It fell 0.7% to close at 11,004.62 points.

According to the US Department of Labor,PPI index It is a measure of producer spending inflation. November today, with the PPI index higher than analysts’ expectations. and destroy that hopeinflationof the United States is past its prime

The headline PPI, which includes food and energy, rose 7.4 per cent in November year on year. That was above analysts’ expectations of 7.2%.

On a month-on-month basis, headline PPI rose 0.3% in November, above analysts’ expectations of 0.2%.

The core PPI, which excludes food and energy, rose 6.2 per cent in November from a year earlier. That was above analysts’ expectations of 5.9%.

On a month-on-month basis, core PPI rebounded 0.4% in November, above analysts’ expectations of 0.2%.

Investors keep an eye on the consumer price index. (CPI) On 13 December, before the Fed revealed the results of its meeting.monetary policyOn December 14, which is the last meeting this year.

Markets will also keep an eye on Fed Chairman Jerome Powell’s statements, which will set the direction.interest ratethe Fed in 2023, including the release of policy interest rate expectations (Dot Plot) at this meeting. This will signal the Fed’s interest rate outlook through 2025.

Investors expect the Fed to raise interest rates by 0.50% to a range of 4.25-4.50% in this round of meetings. after raising 0.75% for four consecutive times While Mr Powell said the Fed would slow down the adjustment.raise interest ratesin Dec.

Markets also expect the Fed to raise interest rates beyond 5.00% in the middle of next year following the release of a strong non-farm payrolls report. This shows that tightening the monetary policy of the Fed in the past has not been able to prevent the heat of theLabor market This led to speculation that the Fed would continue to raise interest rates next year in order to do soeconomic slowdowndown and prevent the rise of inflation.

CME Group’s FedWatch Tool indicates that investors now expect the Fed to raise interest rates to a range of 5.00-5.25% in May 2023. After previously forecasting a level of 4.75-5.00%

However, Standard Chartered Bank released a report expecting the Fed to do solower interest ratesa total of 2.00% next year if the US faces a recession

The report says that The Fed has assessed risksinflationtoo low in 2022 as Fed Chairman Jerome Powell admitted that inflation was not a temporary phenomenon as the Fed previously said. This caused the Fed to raise interest rates significantly this year to curb inflation.

A rate hike in 2022 puts the Fed at risk of what the economy could face.recessionIn 2023, while the Fed underestimates the damage to the economy from monetary policy tightening,

“Declaration of FOMC There has been a change from the previous focus on the need to extend the tightening of monetary policy. to the need to allocate liquidity in the economy in order to avoid a serious collapse,” the report said.