Producer Price Index ($PPI) falling short of the expected 5.4%

Data show that the February Producer Price Index ($PPI) increased by 4.6% yearly, falling short of the expected 5.4%. Furthermore, the New York Fed's Manufacturing Index for March came in at -24.6, far worse than the expected -8 and prior -5.8. February's retail sales figures highlight the impact of inflation on consumer spending. Sales fell in nine of the thirteen retail categories. This downward trend suggests that consumers are beginning to feel the effects of persistent inflation and interest rate hikes by the Federal Reserve.

Even with the collapse of California's Silicon Valley Bank, the US consumer price inflation data for February bolsters expectations that the Federal Reserve will raise its key interest rate by 0.25 percentage points. However, given the turmoil at Credit Suisse this morning, some economists believe the Fed will pause its rate hike campaign at its upcoming meeting due to the uncertainty created by recent financial market troubles.