PPI Explodes to 6%
Just a day after CPI shocked markets, wholesale prices delivered an even louder wake-up call. The inflation fire is spreading fast.
🔹 The Headline Hit
Final demand PPI surged 1.4% for April, the sharpest monthly jump since March 2022 and more than double the 0.5% forecast . Year-over-year, the index blasted to 6.0%, the hottest read since December 2022 .
🔹 What Lit The Fuse
Energy prices kept driving the bus. A 7.8% monthly surge in energy costs powered the goods index 2.0% higher . Gasoline alone skyrocketed 15.6%, accounting for over 40% of the entire goods price gain . Crude oil parked above $100 continues punishing every link in the supply chain.
🔹 The Services Shock
Services prices climbed 1.2%, tying the largest increase since March 2022 . Trade margins jumped 2.7%. Here is the real alarm: transportation and warehousing costs exploded 5.0% in a single month . Truck freight screamed 8.1% higher, the biggest move since records began in 2009 . Diesel and jet fuel costs are now rippling into every physical good you touch.
🔹 Core Is Catching Fire
Strip out food and energy, core PPI still surged 1.0% for the month, triple the 0.3% forecast . Year-over-year core hit 5.2% . Excluding food, energy, and trade services, the measure the Fed truly watches jumped 0.6%, the largest advance since October 2025 . The pipeline pressure is real and broadening.
🔹 Upstream Pain Flowing Down
Intermediate demand processed goods soared 2.7% monthly, up 9.4% year-over-year . Unprocessed goods exploded 4.1% for the month, up a staggering 20.9% annually . These raw input costs eventually land at the consumer's feet.
🔹 Market Rewrites The Script
CME futures now price a roughly 50% chance of a rate hike this year, a complete reversal from prior cut expectations . The 2-year Treasury yield punched through 4% immediately . Rate cuts are dead. The debate is now hold versus hike .
🔹 Wall Street Speaks
Analysts called the report "ugly" and noted inflation is now "firmly in the supply pipeline" . Peter Cardillo of Spartan Capital summed it: the #Fed stays frozen all year . Paul Nolte warned that if PPI keeps outpacing CPI, corporate margins get squeezed hard .
The Full Picture
#CPI ran hot yesterday. #PPI exploded today. Energy triggered this, but services and core prices prove the infection is spreading. Supply chain costs are climbing everywhere, and businesses will keep passing the bill to consumers. The Fed's hands are tied tighter now than any point this year.
Friends, is this a temporary war-driven spike or a structural inflation shift? Drop your take below.
#GateSquareMayTradingShare
Just a day after CPI shocked markets, wholesale prices delivered an even louder wake-up call. The inflation fire is spreading fast.
🔹 The Headline Hit
Final demand PPI surged 1.4% for April, the sharpest monthly jump since March 2022 and more than double the 0.5% forecast . Year-over-year, the index blasted to 6.0%, the hottest read since December 2022 .
🔹 What Lit The Fuse
Energy prices kept driving the bus. A 7.8% monthly surge in energy costs powered the goods index 2.0% higher . Gasoline alone skyrocketed 15.6%, accounting for over 40% of the entire goods price gain . Crude oil parked above $100 continues punishing every link in the supply chain.
🔹 The Services Shock
Services prices climbed 1.2%, tying the largest increase since March 2022 . Trade margins jumped 2.7%. Here is the real alarm: transportation and warehousing costs exploded 5.0% in a single month . Truck freight screamed 8.1% higher, the biggest move since records began in 2009 . Diesel and jet fuel costs are now rippling into every physical good you touch.
🔹 Core Is Catching Fire
Strip out food and energy, core PPI still surged 1.0% for the month, triple the 0.3% forecast . Year-over-year core hit 5.2% . Excluding food, energy, and trade services, the measure the Fed truly watches jumped 0.6%, the largest advance since October 2025 . The pipeline pressure is real and broadening.
🔹 Upstream Pain Flowing Down
Intermediate demand processed goods soared 2.7% monthly, up 9.4% year-over-year . Unprocessed goods exploded 4.1% for the month, up a staggering 20.9% annually . These raw input costs eventually land at the consumer's feet.
🔹 Market Rewrites The Script
CME futures now price a roughly 50% chance of a rate hike this year, a complete reversal from prior cut expectations . The 2-year Treasury yield punched through 4% immediately . Rate cuts are dead. The debate is now hold versus hike .
🔹 Wall Street Speaks
Analysts called the report "ugly" and noted inflation is now "firmly in the supply pipeline" . Peter Cardillo of Spartan Capital summed it: the #Fed stays frozen all year . Paul Nolte warned that if PPI keeps outpacing CPI, corporate margins get squeezed hard .
The Full Picture
#CPI ran hot yesterday. #PPI exploded today. Energy triggered this, but services and core prices prove the infection is spreading. Supply chain costs are climbing everywhere, and businesses will keep passing the bill to consumers. The Fed's hands are tied tighter now than any point this year.
Friends, is this a temporary war-driven spike or a structural inflation shift? Drop your take below.
#GateSquareMayTradingShare
