Inflation Reanimator! Producer Prices Soar In August As Goods Inflation Reignites While WTI Crude Hits $90

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by confoundedinterest17

Jerome Powell is the God of Hellfire and he brought us …. FIRE! By rapildy raising The Fed’s target rate rapidly. And then sending mixed signals as inflation begins heating up … again.

WTI crude just hit $90. Rising oil prices may be one of the reasons.

After yesterday’s hotter than expected rebound in CPI, all eyes are on PPI for signs that the pipeline for inflation may be more dove-friendly.

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It wasn’t!

Producer Prices rose 0.7% MoM in August (up from +0.3% in July and hotter than the +0.4% exp). That is the hottest PPI since June 2022, and pushed YoY prices up 1.6%…

 

Source: Bloomberg

Goods prices are reaccelerating fast, now back into inflation YoY (as Services cost growth slowed only modestly)…

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Source: Bloomberg

As a reminder, much of last month’s PPI rise was driven by a big jump in portfolio management costs – as stocks soared. August saw a further rise in those costs…

 

Source: Bloomberg

More problematically, the pipeline for PPI appears to have inflected as intermediate demand is re-accelerating…

 

Source: Bloomberg

This is not what The Fed wanted to hear.


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