The rise in inflation caused by higher gas prices continues to hurt the US customer and could lead to higher interest rates, which will hurt the U.S. equity markets, and the economy.
The PPI feels the brunt of the war/blockade/attrition with Iran. The PPI for August, 2026 showed renewed pressure from rising energy prices with a gain of 0.4% MoM and a whopping 5.4% YoY. The chances of an interest-rate hike at the Federal Reserve’s meeting next week has risen to 80%.
The Core PPI excluding food and energy, advanced 0.2% last month and 4.6% from a year ago, so its not just energy that is causing damage to large sections of Americans.
Here are the numbers from Bloomberg:
The markets have reacted negatively to it - the indices are down 1%, and treasury yields have climbed up - the 30 year has shot up to a high of 5.35%. That is not a good sign, I think we could see renewed selling pressure.
The rise in inflation caused by higher gas prices continues to hurt the US customer and could lead to higher interest rates, which will hurt the U.S. equity markets, and the economy.
I don’t believe investors are paying enough attention to rising interest rates, and will eventually capitulate when it gets too high. It would be prudent to reduce exposure before the stampede to the exit.
