Inflation Data Looms Large as Fed Weighs Rate Hike
The US economy is bracing for two crucial inflation reports this week, which could influence the Federal Reserve's decision on interest rates. The producer price index (PPI) will be released on Thursday, followed by the consumer price index (CPI) on Friday.
Wall Street expects the Fed to raise its key interest rate at least once this year to combat rising prices. Inflation has been above 3%, exceeding the central bank's target of 2%. This has put pressure on households and businesses, with price growth outpacing wage growth.
The main drivers of inflation are rising energy prices, particularly due to the US-Iran conflict, which has restricted shipping through the Strait of Hormuz. Additionally, ongoing tariff disputes between the US and most countries around the world have contributed to higher prices for goods transported by sea.