A solid rise in US producer prices in January aligns with consumer price data that suggests inflation may be picking up. For the year through January, the producer price index rose 3.5%, matching December’s gain and reflecting a moderately faster increase vs. recent history.
Rising US debt remains a threat to the economy, warns hedge fund titan Ray Dalio, who told the Trump administration that the country faces an “economic heart attack” without a plan to reduce the red ink. “It’s like if I was a doctor and I was speaking with you about your condition, I would say to you, this is now very, very serious,” he told CNBC on Thursday.
Americans are having a harder time managing rising debt burdens, according to a quarterly report from the New York Federal Reserve. The percentage of households becoming seriously delinquent (a missed payment for 90+ days) on their auto loans and credit cards rose to a 14-year high.
Gold resumed its upward trend of late, setting another new record high on Thursday: $2945 an ounce. “The major factor is political uncertainty and the economic consequences … the [producer price inflation released on Thursday] was pretty much neutral and it didn’t really have much of an effect on gold; investors around the world are worried about what the Trump policies will do to the overall economy,” says Jeffrey Christian, managing partner of CPM Group.
India will work with Washington to more than double bilateral trade to $500 billion by 2030, said Indian Prime Minister Narendra Modi at a joint press conference with US President Donald Trump on Thursday. The remarks follow Trump’s presidential memorandum outlining a plan to impose “reciprocal tariffs” on foreign nations, including India.
The US 10-year yield reversed sharply on Thursday after spiking higher on Wednesday following hotter-than-expected news on consumer inflation. One catalyst was a view that yesterday’s producer price inflation data was encouraging after worrisome news on consumer prices. “The PPI for January ran hot on the headline, but some of the details were dovish,” writes Adam Crisafulli, founder of Vital Knowledge, in a note. “After the hot CPI on Wed, people are viewing the PPI as a welcome surprise.”
