Key takeaways
- US producer inflation expected to rise 0.4% in October
- Bitcoin and gold face renewed Fed tightening pressure
- Nasdaq volatility could accelerate if inflation exceeds forecasts
The US Producer Price Index (PPI) report arrives Friday, November 13, with Bitcoin, gold and Nasdaq investors preparing for another inflation test that could strengthen expectations of a December Federal Reserve interest-rate hike.
Economists expect producer prices to increase 0.4% month over month in October, following September's unusually large 1.3% increase. Core PPI, excluding food and energy, is forecast to rise 0.3%, down from 0.7% previously.
The Bureau of Labor Statistics will publish the figures at 8:30 a.m. Eastern Time, potentially providing the next major catalyst for financial markets already struggling with higher Treasury yields and deteriorating risk appetite.
US PPI Inflation Forecast: Why Markets Expect 0.4%
According to the Bureau of Labor Statistics, September producer prices increased 1.3%, the largest monthly advance since March 2022.
Annual producer inflation reached 6.3%, while core prices excluding food and energy climbed 5% from a year earlier.
Economists now expect headline annual inflation to accelerate to 6.6%, despite anticipating a smaller monthly increase.
The report follows the October consumer inflation surprise, which showed CPI rising 0.4% and reinforced expectations of additional monetary tightening.
Markets recently assigned approximately an 88% probability to a quarter-point Federal Reserve increase in December, with the remaining probability favoring a larger 50-basis-point move.
Producer inflation matters because rising business costs can eventually affect consumer prices, although the relationship is not automatic.
Bitcoin and Gold Face Different Risks From Hot PPI
Bitcoin has already fallen below $70,000 as leveraged selling, institutional outflows and tighter financial conditions weaken cryptocurrency demand.
The latest decline follows an earlier Bitcoin liquidation warning, when more than $50 billion in futures exposure raised concerns about accelerated selling.
A hotter-than-expected PPI reading could reinforce expectations of higher interest rates, potentially pressuring Bitcoin through stronger dollar demand and reduced appetite for speculative assets.
Ethereum faces similar conditions after ETF withdrawals reached $144.8 million.
Gold, meanwhile, has struggled despite geopolitical tensions. The metal recently crashed below $3,900 as higher Treasury yields increased the opportunity cost of holding non-yielding bullion.
Softer producer inflation could provide temporary relief for both assets by reducing immediate pressure on interest-rate expectations.
Nasdaq and Nvidia Stocks Brace for Another Inflation Shock
US technology stocks also face significant exposure to Friday's inflation figures.
The Nasdaq has experienced renewed volatility following Nvidia's leadership crisis, which increased uncertainty across AI semiconductor and infrastructure companies.
Higher yields can weigh on growth-stock valuations by reducing the present value of expected future earnings.
That risk is particularly relevant for technology businesses relying on expensive financing to develop AI infrastructure.
The latest inflation concerns have already challenged Wall Street's recovery attempts, leaving investors sensitive to additional surprises.
