Following the CPI report on Wednesday today brings the PPI, due at 1330 GMT

Previews via …

Morgan Stanley:

  • We expect core PPI to improve in January following a flat reading in December, as categories that saw notable weakness last month (such as industrial chemicals, which posted a 6.7% decline) reverse out.
  • Core PPI rises 0.22% in our forecast. For headline PPI, we expect food prices to be flat but see a boost from energy prices, as oil, diesel, and jet fuel prices have come off their lows hit in December.
  • A print in line with our forecast would lower core PPI on a year-over-year basis (NSA) to 2.6% from 2.8%. Headline PPI would fall to 2.3%Y from 2.5%Y.


  • The pullback in PPI in December supports the picture of relatively subdued inflation which will allow the Fed to be patient in its approach to further rate hikes.
  • We have been watching PPI data for evidence that tariffs have been feeding through to higher prices, but so far the signs of this effect have been relatively limited.

(Take note of Citi's first line … yep, inflation is front and centre now for the Fed … and its subdued.)