As the conflict between Russia and Ukraine is showing signs of easing up, the price of Crude Oil dropped below $95 which eases up the fears of an impending recession for the U.S. and probably in a global scale. As a result, the price is different stocks jumped up reporting gains in retailers and technology shares. The S&P 500 bounced back up after 3 days of falling down.
The prime ministers of Poland, the Czech Republic and Slovenia plan to announce a “broad package” of support measures and are making an unexpected trip to Kyiv by train to meet with Ukrainian President Volodymyr Zelenskiy. Today, Russia and Ukraine continued negotiations, while a European Union official said about 12 million people have been affected by the war.
Prices paid to U.S. producers rose strongly in February on higher costs of goods, highlighting inflationary pressures that set the stage for the Fed’s first rate increase since 2018 on Wednesday. Still, officials will have to balance curbing higher prices without hampering the economic bounce back.
A separate report showed New York state manufacturing activity weakened considerably in early March as orders fell and delivery times lengthened. While that bolsters the case for the Fed to be aggressive in tamping down inflation in the coming months, the central bank will have to balance curbing inflation without suffocating economic growth.
Excluding the volatile food and energy components, the so-called core PPI increased 0.2% from a month earlier and was up by a 8.4% from a year ago. Producer prices excluding food, energy and trade services, rose 0.2% from January. Compared with a year earlier. A measure often preferred by economists because it strips out the most volatile components.
The PPI adds to inflationary concerns among policy makers even as prices in the early stages of production had begun to show some deceleration. The worrisome price trends have been re-aggravated since the late-February invasion, just as the Fed prepares to announce rates liftoff this week.
The Fed will have the latest inflation data in hand for its meeting that concludes Wednesday, when policy makers are widely expected to increase interest rates for the first time since 2018. Along with the decision, the Fed will release updated forecasts for inflation and growth.
