Wholesale inflation came faster than expected last month in another disappointment for investors and decision makers in the hope of cooling price.

Manufacturer Price Index (PPI) rose 0.4% in January versus economists for economists for 0.3% and 0.2% in December. On a year-over-year basis, PPI was higher with 3.5% against estimates for 3.2% and 3.3% in December.

Core PPI, which excludes food and energy components, rose 0.3% in January against forecasts for 0.3% and 0% in December. Core PPI year-over-year was higher with 3.6% against estimates for 3.3% and 3.5% in December.

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Usually not too far followed, today’s PPI figures took more import, which came a day after the markets were surprised by the Consumer Price Index data (CPI) for January, which came in much stronger than estimates. By testing before Congress yesterday after the rapid inflation report, Federal Reserve President Jerome Powell admitted that there is more work to be done on the inflation front.

The PPI number became even more important when Powell said he would be interested in seeing if today’s number confirmed the disappointing CPI data.

After cutting prices 100 basic points in the last months of 2024, Powell and the rest of the Fed have enabled their intention to put a break on a further monetary ease until there is a remarkable slowdown in either the economy and/ or inflation.

Before the PPI number was announced, the markets had only priced in a rate cut for all 2025, according to CME Fed Watch Tool.