The PPI posted its biggest increase since March 22, rising 6.0% YoY and 1.2% MoM,  3x the 0.4% estimate. Core PPI, which excludes food and energy, rose 1.0% verus the 0.4% estimate.

Energy costs (+7.8%) which have soared due to Trump’s war on Iran drove the bulk of the increase. But the services index popped 1.2% due largely to a sharp 2.7% rise in trade services, a sign that tariff costs are impacting prices.

Vol has been handily suppressed, meaning the SPX futures are only slightly higher on the bad news.

…the hot inflation numbers are driving the 10Y to test recent highs where we expect the Fed/Treasury to take a stand.

We should soon see a rebound in the 2s10s.