There is nothing much to post, just a brief introduction to the relationship and interpretation of CPI and PPI data, because PPI data will be announced tonight!

Powell's speech was rather cautious, and there was not much to summarize. This year's interest rate cut window period, multiple interest rate cuts are concentrated in 2025, that's roughly what it means. As retail investors, it is enough for us to know the general framework, and there is no need to pursue the details. Often, pursuing the details will make our thinking more confused!

The relationship and interpretation between CPI data and PPI data and the impact of CPI data on PPI data:


The relationship and interpretation between CPI (Consumer Price Index) and PPI (Producer Price Index)
1. CPI (Consumer Price Index)
CPI is an indicator that measures the price changes of goods and services purchased by a group of consumers. It reflects the changes in the cost of living of residents and is usually used to measure the level of inflation. An increase in CPI means that the cost of goods and services purchased by consumers has increased, and vice versa.

2. PPI (Producer Price Index)
PPI is an indicator that measures price changes of goods and services sold by producers. It reflects price changes in the production process and is often used to predict future CPI changes. An increase in PPI means an increase in production costs, which may be transmitted to consumer prices, leading to an increase in CPI.

The relationship between CPI and PPI
1. Conduction effect
Changes in PPI usually precede changes in CPI. Increased production costs (PPI increases) will gradually be transmitted to consumer prices, causing CPI to rise. Vice versa, when PPI falls, production costs fall, which may eventually lead to a fall in CPI.

2. Predictive effect
Since PPI reflects price changes in the production process, it can be used as an important indicator to predict changes in CPI. If PPI continues to rise, it may indicate that CPI will also rise in the future.


3. Time lag
There is a time lag effect in the impact of PPI on CPI. It takes some time for changes in producer prices to be fully transmitted to consumer prices. Therefore, the impact of changes in PPI on CPI usually lags behind.


The impact of CPI on PPI
Although the impact of PPI on CPI is more direct and obvious, CPI may also affect PPI in turn:


1. Demand-driven
When CPI rises, consumer prices increase, which may lead to a decline in residents' consumption demand, which in turn affects producers' production and pricing strategies, and ultimately affects PPI.


2. Cost transmission
If an increase in CPI leads to an increase in labor costs and other production factor costs, producers' production costs will increase, which may be reflected in the PPI.


Interpretation
1. CPI rises, PPI rises
This situation usually indicates that the economy is in an expansion phase, production costs are increasing, and consumer prices are also rising.


2. CPI rises, PPI falls
This situation may indicate lower costs in the production process, but strong consumer demand, leading to higher prices for consumer goods.


3. CPI falls, PPI rises
This situation may indicate that production costs have increased, but consumer demand is weak and producers are unable to fully pass on the costs to consumers.


4. CPI and PPI decline
This situation usually indicates that the economy is in a contractionary phase, with production costs and consumer prices falling.


Summarize
CPI and PPI are two important economic indicators, and there is a complex relationship between them. Changes in PPI usually precede changes in CPI and have a certain predictive effect on CPI. At the same time, changes in CPI may also affect PPI in turn, especially through the transmission of demand and costs. Understanding the relationship between these two indicators helps to better grasp the economic operation status and price change trends.


(Friendly reminder: These economic data will have a direct impact on the US stock market, and can only have an introductory impact on the B circle. The curator popularizes these in order to add some small knowledge to everyone, and it is not intended to be instructive. It never hurts to learn more.)


Also pay attention to the initial unemployment claims in the evening. This data has been mentioned before, so I won’t say much. It belongs to employment data!

I wish you all good fortune and a good mood every day~~ #BTC☀