September PPI just dropped and it's ugly:
Headline came in at 6.3% vs 5.3% expected — a full point miss
Core at 5% vs 4.4% expected
This is disgustingly bad. Producer inflation running this hot means the disinflationary narrative just took a hit. If input costs stay elevated, margins compress or companies pass it through — neither outcome helps risk assets. Fed's probably not in a rush to cut if upstream price pressures won't cooperate.
Watch how this bleeds into CPI and whether the market reprices rate expectations. Not the print you want when you're long duration or counting on easing.
Headline came in at 6.3% vs 5.3% expected — a full point miss
Core at 5% vs 4.4% expected
This is disgustingly bad. Producer inflation running this hot means the disinflationary narrative just took a hit. If input costs stay elevated, margins compress or companies pass it through — neither outcome helps risk assets. Fed's probably not in a rush to cut if upstream price pressures won't cooperate.
Watch how this bleeds into CPI and whether the market reprices rate expectations. Not the print you want when you're long duration or counting on easing.