Wholesale inflation jumps 6% in April on annual basis, biggest increase since 2022

• April headline PPI rose 1.4% month-over-month, nearly tripling the +0.5% expectation and marking the hottest increase since March 2022.
• Core PPI (excluding food and energy) increased 1.0% month-over-month, also significantly above the +0.3% estimate, the warmest since March 2022.
• Year-over-year final demand PPI jumped 6.0%, surpassing the +4.9% estimate and representing the hottest reading since December 2022.
• Treasury yields surged, with the 2-year yield topping 4% and the 10-year yield nearing 4.5%, reflecting increased inflation expectations and a more hawkish outlook for interest rates.

April's Producer Price Index (PPI) data came in significantly hotter than expected across all key metrics, indicating persistent inflationary pressures. The headline PPI, core PPI, and year-over-year final demand all exceeded forecasts, leading to a sharp rise in Treasury yields and a negative reaction in equity futures. This suggests a challenging environment for inflation control and potential implications for future monetary policy.