Inflation came in as expected. The problem? “As expected” is still too hot. The latest Producer Price Index showed inflation pressures continuing to build:
📈 Headline PPI: +5.4% year over year 📈 PPI excluding food, energy and trade: +4.7% ✈️ Airline prices: nearly +20% year over year ⚖️ Legal services: about +8% 🏥 Hospital inpatient care: +4.3%
Those details matter because several feed into the Fed’s preferred PCE inflation gauge, and they’re not giving policymakers much reason to feel comfortable.
Markets are taking notice. The probability of a rate hike at next week’s Fed meeting has climbed to 72%, while the 10-year Treasury yield has moved above 4.9% and closer to the 5% level.
In this episode of Markets with Megan, Megan Horneman breaks down what today’s PPI report tells us about inflation, interest rates, and what investors should be watching when CPI arrives tomorrow.
🎧 Watch the latest Markets with Megan and get a complete history of all episodes at MarketsWithMegan.fm.
Disclaimer: material was prepared by Verdence Capital Advisors, LLC (“VCA”). VCA believes the information and data in this document were obtained from sources considered reliable and correct and cannot guarantee either their accuracy or completeness. VCA has not independently verified third-party sourced information and data. Any projections, outlooks or assumptions should not be construed to be indicative of the actual events which will occur. These projections, market outlooks or estimates are subject to change without notice. This material is being provided for informational purposes only and is not intended to provide, and should not be relied upon for, investment, accounting, legal, or tax advice. Past performance is not a guarantee of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product or anynon-investment related content, made reference to directly or indirectly in these materials will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. You should not assume that any discussion or information contained in this report serves as the receipt of, or as a substitute for, personalized investment advice from VCA. Due to various factors, including changing market conditions and/or applicable laws, the c...
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