China CPI, PPI rise in November
China’s consumer price index (CPI) and producer price index (PPI) both rose in November, indicating that inflationary pressures are starting to build in the world’s second-largest economy.
The National Bureau of Statistics reported that the CPI increased by 1.5% year-on-year in November, up from 1.2% in October. This was driven by higher food prices, which rose by 2.4% year-on-year, as well as increases in the prices of non-food items such as clothing and healthcare.
Meanwhile, the PPI rose by 12.9% year-on-year in November, up from 12.5% in October. This was driven by higher prices for raw materials and industrial products, as well as increased demand for manufactured goods.
The rise in both the CPI and PPI indicates that inflationary pressures are building in China, which could prompt the central bank to tighten monetary policy in order to control inflation. However, policymakers are also facing pressure to support economic growth, which has been slowing in recent months.
Fed December minutes reveal cautious approach to rate hikes
The minutes of the Federal Reserve’s December meeting, released on Wednesday, revealed that policymakers are taking a cautious approach to future rate hikes as they monitor the impact of the Omicron variant on the economy.
The Fed raised interest rates by 25 basis points in December, its first rate hike since 2018. However, the minutes indicated that policymakers are divided on the pace of future rate hikes, with some officials advocating for a more aggressive approach to combat inflation, while others are concerned about the potential impact on economic growth.
The minutes also revealed that the Fed is closely monitoring the impact of the Omicron variant on the economy, with some officials expressing concerns about the potential for disruptions to supply chains and consumer spending.
Overall, the minutes suggest that the Fed is taking a cautious approach to future rate hikes, as it seeks to balance the need to control inflation with the potential risks to economic growth posed by the Omicron variant.
In conclusion, the latest data on China’s CPI and PPI indicate that inflationary pressures are building in the world’s second-largest economy, while the Fed’s December minutes reveal a cautious approach to future rate hikes as policymakers monitor the impact of the Omicron variant on the economy. Investors will be closely watching both developments in the coming months as they assess the outlook for global economic growth and monetary policy.