US December PPI Data Brief:

• Data Performance is Mild:

According to data released by the US Bureau of Labor Statistics, the Producer Price Index (PPI) rose by 0.2% month-on-month in December, lower than the market expectation of 0.3%. The year-on-year increase rose from 3.0% in November to 3.3%, reflecting the impact of a low price base last year, particularly the decline in energy prices.

• Market Expectations and Federal Reserve Policy:

• Although the PPI data performed mildly, a strong labor market may lead the Federal Reserve to maintain the current interest rate policy until the second half of this year, without rushing to lower rates further.

• Divergent Views on Wall Street:

• Bank of America believes that the Federal Reserve's easing cycle has ended.

• Goldman Sachs predicts there will be one rate cut each in June and December this year (previously expected to be three cuts).

• Market Impact:

• Mild PPI data may alleviate market concerns about inflation in the short term, but the strength of the labor market will continue to provide reasons for the Federal Reserve to tighten policy.

• Investors need to pay attention to future inflation and employment data performance to assess the actual direction of Federal Reserve monetary policy.