Annual inflation reading coming in at 6.5%...Not good

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Wholesale prices rose 0.3% in October, putting annual rate at 6.5%, the highest in nearly four years

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So it is not as high as it was 4 years ago. The auto pen set inflation records, did it not?

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Something is going to have to give...interest rates?

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They need to go up

PPI is the annual inflation rate now?

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They need to go up

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A lot

Lower than expected…..

Overnight rates follow the 2 year, it’s at 4.86, so the Fed is way behind, probably need a .50 basis point hike in December, but only certain of a .25 at this point and rising.

So it showed things are cooling. No wonder bond market isnt imploding

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The October 2026 Producer Price Index (PPI) confirmed that monthly wholesale inflation cooled significantly to 0.3% (down from a revised 1.4% surge in September), though the annual rate accelerated to 6.5%, marking its highest level since November 2022. While the monthly slowdown offered relief compared to consensus forecasts, underlying price pressures in freight, food, and core goods remain elevated

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So it showed things are cooling. No wonder bond market isnt imploding

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Is this sarcasm?

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Annual inflation reading coming in at 6.5%...Not good

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It's PPI, not PCE, but to think that such a high number won't have an impact on consumers is just wishful thinking, especially if it maintains at that level.

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Something is going to have to give...interest rates? The economy? Tariffs?

Home Sales are stalled.

Vehicle Sales are stalled.

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Consumers have fricked themselves and the industry on vehicles. They've been buying new vehicles at insane prices and high rates, so of course the manufacturers have kept pumping them out. I was at a dealership yesterday and the lot was so full there were barely any places for customers to park. I saw a few parking across the street in the median.

Home sales were always going to be fricked due to having sub-5% rates for over a decade. This set fire to the housing market and now we have tons of homeowners who are facing a scenario of either selling to pay about the same mortgage for less than what they already have or stay put.

Meanwhile Congress is going to spend another ~$1.8T-$2T in deficit spending, keeping the USD's value so low that it's taking over $1 in deficit spending to equal $1 in GDP growth. This is in an environment where something like half of the population has built its living standard on some sort of federal program (Medicare, Social Security, SNAP, etc).

All of this comes down to the point that if you cut enough spending AND raise rates high enough for long enough to arrest inflation (because it's going to take both), it's going to cause a very strong recession. Perhaps a depression.