According to the latest data from the U.S. Bureau of Labor Statistics, the annual Producer Price Index (PPI) in the United States reached 3.3% in July 2023, far exceeding the market expectation of 2.5%, marking a new high since February of this year. This data has raised concerns in the market about inflation Rebound.

At the same time, the PPI rose by 0.9% month-on-month, the largest monthly increase since June 2022. The core PPI (excluding food and energy prices) increased by 3.7% year-on-year, higher than the expected 2.9%; it grew by 0.9% month-on-month, significantly exceeding the expected 0.2%. If trade services are further excluded, the PPI grew by 0.6% month-on-month, the largest increase since March 2022.

These data indicate that the upstream of the U.S. industrial chain is facing a new round of inflationary pressure. Previously, the market widely expected the Federal Reserve to initiate a rate cut cycle in September. However, with the release of this data, expectations for a rate cut in September have sharply cooled. Some aggressive financial institutions have even started to predict that the Federal Reserve may raise interest rates by 25 basis points within the year.

As a result, the three major U.S. stock index futures experienced a short-term decline after the data was released. The changes in this series of economic indicators have triggered a rethinking of the trajectory of the U.S. economy in the market and have also brought new challenges to the Federal Reserve's future monetary policy decisions.

Analysts point out that although single-month data is insufficient to determine long-term trends, the unexpected rise in July's PPI has indeed added uncertainty to the U.S. economy. Economic data in the coming months will become the focus of market attention, and they will largely influence the direction of the Federal Reserve's policies and the performance of global financial markets.