PPI Comes in Hot at 0.7%, Crypto Prices Drop as Fed Decision Looms

On an annual basis, producer prices are now running 3.4% hotter than a year ago, ahead of the 3.0% forecast and matching the largest 12-month advance since February 2025, as per the Bureau of Labor Statistics’s data.

Strip out food and energy, and the picture doesn’t improve much. Core PPI – excluding those volatile categories – rose 0.5% for the month, again well above the 0.3% estimate. The so-called “supercore” measure, which also strips trade services, climbed 0.5% – its tenth consecutive monthly gain.

The breakdown tells its own story. Final demand goods were the main culprit, rising 1.1% -the sharpest monthly climb since August 2023. Fresh and dry vegetables alone accounted for over 20% of that jump, spiking nearly 49%. Diesel, eggs, gasoline, and jet fuel also pushed higher. On the services side, traveler accommodation surged 5.7%, while apparel retailing fell 4.5% and airline passenger services declined.

What This Means for Today’s Fed Decision

The Federal Reserve concludes its two-day March meeting today, with Chair Jerome Powell set to speak at 2:30 p.m. ET. Markets are pricing in a 99% probability that the Fed holds its benchmark rate steady in the 3.5%–3.75% range, and this morning’s PPI print does nothing to change that math – if anything, it hardens the case for staying put.

The hotter-than-expected producer inflation arrives at a particularly uncomfortable moment. According to CBS, rising energy prices since the outbreak of the Iran war have led a number of forecasters to rewrite their interest rate predictions, with some economists now saying there’s a chance the Fed won’t cut rates at all this year.

Futures pricing suggests policymakers won’t consider easing until at least September, more likely October, and even then just a single cut this year. A PPI print this far above expectations only reinforces that timeline. The data gives Powell and the FOMC even less political room to telegraph cuts – any hint of dovishness now risks being read as dismissing an inflation problem that is clearly not resolved.

“The decision itself is almost guaranteed – a rate hold at the March meeting. But any hints Chair Powell might drop about the path of future interest rates will be key,” said BeiChen Lin, senior investment strategist at Russell Investments.

Beyond today’s hold, the more important question is whether the dot plot – the Fed’s grid of individual rate projections – shifts hawkishly. If officials nudge their inflation forecasts higher and pare back expected cuts, markets will feel it. The PPI data makes that scenario more, not less, likely.

Crypto Markets Take the Hit

Risk assets are not taking the macro backdrop well. According to CoinMarketCap data, Bitcoin is trading around $72,394, down nearly 2% on the day and off about 1.2% in the past hour. Ethereum is faring worse, sliding 3.4% in 24 hours to $2,243. Solana dropped 3.25% on the day, while XRP shed 2.9%. Dogecoin fell over 3%.  The total crypto market cap now stands at $2.49 trillion after losing 1.46%.

The broader pattern is clear: with rate cuts pushed further out and inflation data coming in hot, the appetite for speculative assets is thin. Crypto, which spent much of the past two years feeding on easy-money expectations, is now contending with a reality where those expectations keep getting deferred. A Fed that holds firm – and signals it may hold even longer – is not the backdrop risk-on traders were hoping for heading into spring.

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