This is the most interesting PPI report in some time. The headline number fell from 3.3% to 2.8%. But, Core PPI (less food, energy and trade services) ticked higher. We’re used to seeing food and energy prices as the cause of higher inflation. Apparently, this time it’s everything else that is ticking higher.
When core price increases become problematic, the solutions aren’t quite as simple as driving down oil/gas prices (which, by the way, bounced pretty dramatically yesterday.)
It should be interesting to watch the 10Y. Will the triangle continue to hold?
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