Final PPI in the US rose 8.3% in August, continuing its upward movement from 7.8% in July. The aforementioned data revealed that annual producer inflation is at its highest level since the calculation period that started in November 2010. On a monthly basis, PPI realized as 0.7% in August after 1% increase in July. Core PPI, which excludes food and energy, also rose, reaching 6.7% in August from 6.2% YoY in July.
In sub-items; monthly increases in energy materials and related goods groups stand out. Against this; If we look at the increase in core indicators, we can reveal the cost pressure in terms of inflation in general. We will have the chance to see the convergence rate in August CPI next week, but this indicator is also important in terms of expanding the natural limits of inflation, as the effects of PPI will also have a lagged potential for CPI. And the main problem at the moment is the cost burden of the producers. We see the flash effects here and in such periods when the demand is alive, the reflection time on consumer inflation may be shortened. In July, CPI was announced as 5.4%. The margin with the PPI has widened according to the July CPI, if we see a cooling or flattening in inflation, it will relieve some in the short term, but it will not eliminate the worries.
In the process leading up to the September FOMC, there is not much reason for concerns about inflation to shift. It is very likely that the Fed will go towards playing the inevitable tapering card, so the potential for tapering is still very high before the end of the year.
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