That's a 50+ bps rate hike worthy number. And right before a midterm election that is already looking like a bloodbath for the incumbent party whose policies are directly responsible for the result.
I am honestly terrified at the ratfuckery the GOP will do this election to steal it. You always have to plan for republicans doing the most evil things possible.
When will people finally realize that the rules DO NOT MATTER anymore, they don't give a shit. They'll lock them out, they'll launch bullshit investigations and deport them, they'll do literally anything. Wake up to reality.
I've seen a lot of comments talking about the timing of rate hikes relative to the midterms, and I have to admit that I don't see the immediate connection. If they hike by 50 in October, how does that immediately affect people who are voting a week later?
A rate hike carries a symbolic meaning beyond its functional purpose. It's an official recognition that inflation is high. A large rate hike is a recognition that inflation is dangerously high. A large, unexpected rate hike is as close as you'll get to an official "everybody panic" sign from what has - for the last few decades - become a very conservative (small c) and slow-moving Fed.
Not to mention the impact it has in people's 401(k) balances in the short term.
Given the financial state and economic literacy of the average American voter, the last point about the 401k seems like the only one that is germaine. Even then, I don't see a rate hike triggering some sort of massive stock market crash or anything else that's going to have a big impact in only a handful of business days between the Fed and election day.
I think there is a possibility that the media starts reporting on how the rates are going to start impacting financing for AI infrastructure and capital expenditures, which could stoke a lot of fear, particularly since so many are "diversified" into funds that are largely ai and tech. Yeah, the large ones are going to be safe if they are self funded or funded from a hyper scaler, but there are definitely some weak links that could start a domino effect.
If a silicone bank situation happened today, I gotta imagine it would cause all sorts of chaos.
Typically, rate hikes increase the risk-free rate of return, and large funds seek to maximize return with the least risk, it states what ration in the prospectus , that balancing creates forced selling of stocks. Which causes markets to drop. Which hits 401ks pretty much immediately.
I say typically, because markets have been deeply irrational around AI stocks, so take it with a grain of salt.
Keep in mind it’s producer prices, so this isn’t inflation as it’s recognized in actual products/services consumed, but rather an upstream figure. There’s a strong relationship between the two, but it’s not a 1 for 1 thing, so a 6% push in PPI might only end up being a 3% push in inflation. Over long periods of time the two track well, but that’s measured in years.
The sentiment is still accurate though, hot figures like this certainly add more data in the column for hiking vs not.
However, any difference between the two is eating into the retailer's bottom line which will have a cumulative effect on earnings and the wider stock market. Or at least that is my understanding.
Yes and no, over time yes. But PPI fluctuates more, and that volatility is generally absorbed through the production channel, so it doesn't translate directly to CPI. There's some research in my other comment if you'd like.
Could be any number of things, might be earnings, might result in suppressed wage costs, might be accounted for elsewhere, might just average out across time, there's a lot of moving parts here.
Fair enough, but I was also just pointing out that I didn't think that guy was talking about CPI when you replied to him. Still all good info from you though.
Oh I got you - where they said “any difference between the two” was referring to the spread between CPI and PPI over time, as in if producer prices don’t result in end user inflation they result in lower profits.
I guess I'm not sure what about my comment left you with the opposite impression? That's directly what I said, but it's also not a 1 for 1 relationship, so basic hikes on the magnitude of PPI is not what the Fed will be doing.
Here's some relevant research if you're interested in learning more about the relationship: https://nhsjs.com/2026/evaluating-ppi-as-a-leading-indicator-of-u-s-cpi-inflation-evidence-from-lagged-regression-models-1947-2025/
>Returning to the hypothesis stated in the introduction, that PPI is a leading predictor of CPI at a measurable time lag, the evidence supports it only partially. A leading relationship is statistically detectable. Both PPI lags are significant under HAC standard errors (p = 0.003 and p = 0.022) and BIC selects a short lag structure of two months, which is consistent with a genuine but brief lead. What the evidence does not support is the practical strength implied by the original framing. PPI alone cannot forecast CPI out of sample at all (Model B, R² = −0.56), and adding PPI to a model that already knows recent CPI produces an improvement of about 2% in RMSE that a formal test of equal predictive accuracy cannot distinguish from zero (p = 0.53). A statistically detectable in-sample lead and a useful out-of-sample forecasting gain are therefore not the same thing, and this study finds the first without the second.
TLDR is that while it's correlated across time, it's predictive power in the near term is inconsistent but useful at times. All that means is it's important data, but that economists would not base a more aggressive hike on a hot PPI alone.
I think it's insane how these MAGA can claim California is so expensive all while voting to increase the price of everything in every state by an absurd degree for 4+ years. As these price increases will remain...
The issue is that so much of the spending is seen as required by the major borrowers (governments, AI buildout) that rates are only going to increase inflation in the short term since that borrowing cost gets passed to consumers.
Diluting the returns on AI cap ex will cause pain. There is so much money riding on returns from physical buildouts that don't even have approved sites.
Just watched this yesterday https://www.youtube.com/watch?v=9eBM5IF_bco Interesting theory I thought; the gist being that the AI boom is unstoppable (ie the companies refuse to stop and will eat any increase in borrowing cost). Therefore the rate increases that are meant to curtail this activity end up only impacting those behind the AI players
But don’t worry the 300,000 metric tons of Russian diesel for October will save us! What’s that, that’s only enough for about 15 hours of US consumption? Well surely the November shipment of 500,000 metric tons will save the day! What? That’s only about 1 full day of US consumption?
We can skip the probably, we can see the Russian refinery fires from orbit. What a neat coincidence that when we bombed Iran's refineries we forgot to bomb the ones that export along the Caspian sea to Russia.
Russia is now a net importer of refined petrochemicals, you better believe that if they start exporting some it'll cause more imports from Iran.
We're indirectly buying diesel from Iran, this administration is committed to having American tax dollars spent to... bomb American tax dollars. While being shot at, by American tax dollars.
I don’t think this is even from diesel yet which is the scary part. This is the tariffs finally trickling down. The pain from the diesel shock is gonna make this look like a HUGE discount
You don't have to be an economist to know that whenever there is a geopolitical conflict in the Middle East, particularly a war in Iran, it definitely impacts oil prices. The economic ripple effect is predictable. Logistics transportation and farmers need diesel fuel for their business operations. Those expenses are passed on to customers at the grocery store (you see a higher grocery bill), and inflation refuses to go away quietly.
As always, rather than reading articles I very much implore people read the actual reports - that way you can skip CNBC’s stripped down for dumb people reporting and get full context: https://www.bls.gov/news.release/pdf/ppi.pdf
> The Producer Price Index for final demand increased 1.3 percent in September, seasonally adjusted, the
U.S. Bureau of Labor Statistics reported today. Final demand prices moved up 0.5 percent in August and
0.2 percent in July. (See table A.) The September increase is the largest advance since rising 1.7 percent
in March 2022. On an unadjusted basis, the index for final demand climbed 6.3 percent for the 12
months ended in September, the largest 12-month increase since moving up 6.4 percent in December
2022.
Something of note, the headline figure is obviously grabbing a lot of attention - but what I’ve got my eye on, and what IMO is the most important for understanding long term actual inflation trends (vs energy volatility) is page 13 of this report, the last entry is Final Demand less food and energy, IE Core PPI (it’s not published as prominently as CPI/PCE, that came in at 0.7% month over month. That’s a wild increase, especially in core measures. This is as clear a signal as anything that there’s still significant inflationary pressure downstream.
I won’t profess to know where the aggregate Fed board is leaning, but IMO despite calming PCE figures the hotter CPI print combined with this print coming in very hot make for a fairly compelling case to hike again in October.
It should be noted at least three board members expressed sentiment that they were leaning towards a pause in October, but all of this was prior to both the CPI and PPI releases, with new data comes new outlook. We’ll see.
>In September, prices for final demand goods rose 2.6 percent, and the index for final demand services
advanced 0.8 percent.
>Prices for final demand less foods, energy, and trade services moved up 0.5 percent in September after
increasing 0.3 percent in August. For the 12 months ended in September, the index for final demand less
foods, energy, and trade services rose 5.0 percent.
>Final demand goods: Prices for final demand goods advanced 2.6 percent in September, the largest increase
since data were first calculated in December 2009. Over 80 percent of the broad-based rise in September is
attributable to the index for final demand energy, which jumped 10.8 percent. Prices for final demand foods
and for final demand goods less foods and energy advanced 1.2 percent and 0.3 percent, respectively.
>Product detail: Half of the September increase in the index for final demand goods can be traced to prices for
gasoline, which jumped 20.3 percent. The indexes for diesel fuel, fresh and dry vegetables, jet fuel,
residential electric power, and crude petroleum also rose. In contrast, prices for chicken eggs dropped 39.7
percent. The indexes for thermoplastic resins and materials and for commercial electric power also declined.
(See table 2.)
>Final demand services: Prices for final demand services moved up 0.8 percent in September, the largest rise
since advancing 0.8 percent in April. Nearly half of the broad-based September increase can be attributed to
a 1.4-percent rise in margins for final demand trade services. The indexes for final demand transportation and
warehousing services and for final demand services less trade, transportation, and warehousing also
advanced, 3.4 percent and 0.3 percent, respectively.
>Product detail: Over 20 percent of the September increase in prices for final demand services can be traced
to margins for machinery and vehicle wholesaling, which advanced 3.9 percent. The indexes for truck
transportation of freight, food and alcohol wholesaling, traveler accommodation services, food retailing, and
airline passenger services also rose. Conversely, margins for automotive fuels and lubricants retailing
dropped 30.3 percent. The indexes for securities brokerage, dealing, and investment advice and for chemicals
and allied products wholesaling also fell.
Thanks for summarizing the reports. I think there are many people myself included who don’t have the time or full know how to consistently pull , read, and understand the underlying data/reports.
For what it's worth, almost all of these reports follow a similar cadence - the first paragraph or two are broad summaries of headline data, the next few typically discuss sub groups and what underlying factors were the largest contributors.
After that you start getting piles and piles of data in spreadsheet type form.
All a news org does is cherry pick one or two points from the top paragraphs, throw that in an article, then add something necessary for whomever's clicks they're trying to gather. So you can ingest the summaries from these agencies in the same time that it takes to read an article, and it's usually just as easily accessible.
Just wanted to say thanks for all your contributions on this sub. I know a lot of people pick fights with you, but I appreciate your reasonable approach and consistent reliance on data. It’s one of the highlights of reddit for me and has helped me understand a lot of the batshit insanity of the last 2 years better. So thank you!
I’m one of the folks that has fought with you before but I echo etc’s sentiment. I’ve been going straight to the source more and more lately and sifting out sensationalism
It does, but it also trickles over in different ratios depending on the energy consumption correlated with the production of that final product. Logistics/transportation, including passenger transportation like commercial flight and taxis/Ubers, are obviously very sensitive to fuel prices. Other human labor intensive services, like legal services, may not be quite as sensitive to energy prices.
That might make for shifting ratios of the cost of one product to another product.
I wonder if we're ever going to take antitrust seriously again. The monopolization of everything in the economy is bleeding us dry and no one is doing anything about it. Whenever there's any sort of supply shock or more money in the economy, there's no competition so companies just jack their prices up to unjustifiable amounts and blame whatever the news of the day is. Biden's administration did cute little things here and there but wasn't serious at all, and now there's essentially no antitrust enforcement or legislation anymore. This is really bad and no one is doing or even saying anything about it except a sprinkle of progressive politicians here and there who have no power to do anything.
Antitrust enforcement might help competition and workers rights, but it won't touch inflation brought on by energy prices driven up by completely unnecessary wars.
It would affect the ability of the politicians driving those results to be elected/reelected in the first place. When they only need to curry favor with a select few and can ignore everyone else, bad/stupid shit happens at a higher and more intense frequency.
The inflation wouldn't be as high even with horrific domestic and foreign policy. There are even very few economists taking the monopolization of everything seriously. We're in end times.
I'm glad you could fit Biden's name in there; great job. He's surely to blame, and not Trump.
Trump could’ve just pretended to be president, golfed all day, and taken credit as the beneficial Biden’s policies were unfolding. Instead he fucks it up.
These are all conservative outlets praising Biden’s 2024 economy:
The Hill — June 11, 2024
“World Bank: Impressive US Economy is Powering the World”
The Economist — October 19, 2024
“US Economy: The Envy of the World”
The Wall Street Journal — October 31, 2024
“Next President Inherits a Remarkable Economy”
Parallel pricing and tacit collusion are structural. The shareholders that elect board who dictate/execute corporate governance don't want to compete. Everyday people do not understand how they feed into this system.
Asset managers act as fiduciaries for everyday investors, but people overlook the structural power created when millions of individual accounts are aggregated into blocks of voting shares. Corporate executives are acutely aware that a handful of mega-funds control 10% to 20% of their company’s voting power alongside identical stakes in their top competitors. Because index funds cannot sell underperforming stocks, their ultimate fiduciary duty is to maximize the value of the entire index/fund, which structurally removes the incentive to support aggressive price wars that would shrink overall industry profitability.
When a customer buys a share in an index fund or ETF, they don't really own the underlying and the assets within that wrapper are held in the custody of the asset manager, The asset manager uses the cash to buy the actual stocks, places them in their own institutional custody account, and retains 100% of the legal shareholder rights. The asset manager is the legal owner of record on the company's books, they possess the voting power that shapes corporate boards and executive behavior. While the customer holds the economic right to the index's financial returns, they have completely outsourced the structural power to the asset manager.
This happens across the market though; You and I could own shares in funds with "competing" companies through Vanguard, but because Vanguard has a fiduciary duty, they wouldn't want to overtly support corporate action of one company waging a price war against the other because it devalues the fund.
Tacit collusion and parallel pricing occur legally because corporate leadership naturally adapts to the structural math of common ownership without asset managers ever having to issue explicit commands. The institutional voting blocs elect boards of directors who design executive compensation tied to relative TSR or peer groups in the same industry. A CEO's personal wealth and bonuses are maximized by keeping pace with the industry; a destructive price war would collapse overall market margins, tanking their own company's stock value alongside its rivals and wiping out their compensation. Corporate leaders then selfishly/naturally lean into a strategy prioritizing capital discipline, stock buybacks, and stable pricing over aggressive, risky market expansions. This effectively maintains industry-wide profitability while legally shielding asset managers under the cover of aligning executive pay with long-term shareholder value.
EDIT: I have been called dumb, idiotic, a liar, etc. for articulating this concept on here before, so if you do feel that way, I would love for you to mechanically explain how this is incorrect.
I think you're missing something crucial. Wholesale prices are what businesses pay for their inputs and if it is higher than CPI it means margins are being squeezed.
Or in more simple terms. Companies have not yet "just jack their prices up"
The hits keep coming for this incompetent narcissist who wants us all to commit national along with him. He is morally bankrupt and puts himself and his corrupt family above our national interest at every turn.
May he reap all that he's sown. All we can do now is limit the damage until he is forced to leave office.
Is everyone tired of winning yet? The rest of this is just added bullshit because I need to have a minimum character response. Getting really tired of this.
The terminology here is really awful. It is not a "gain", it is a loss in value of the dollar. There are few people or institutions who see inflation as a good thing on its own.
So it hasn’t hit consumers yet. This is essentially just the cost of gas filtering through the economy. Wholesale prices went up because the cost of transportation skyrocketed. Those prices will transfer to the shelves pretty soon.
eamus_catuli | 9 hours ago
That's a 50+ bps rate hike worthy number. And right before a midterm election that is already looking like a bloodbath for the incumbent party whose policies are directly responsible for the result.
BroughtBagLunchSmart | 7 hours ago
I am honestly terrified at the ratfuckery the GOP will do this election to steal it. You always have to plan for republicans doing the most evil things possible.
303uru | 6 hours ago
They’re going to straight up refuse to seat election winners, Russel Vought has literally written and said so.
Holiday-Hippo-6748 | 3 hours ago
“They” don’t seat anyone in a new congress FWIW.
Mike Johnson has no control over the new congress, even less than none if he’s no longer majority speaker.
303uru | 2 hours ago
When will people finally realize that the rules DO NOT MATTER anymore, they don't give a shit. They'll lock them out, they'll launch bullshit investigations and deport them, they'll do literally anything. Wake up to reality.
rgaya | 5 hours ago
They've been doing it for years. Check out Texas's gerrymandering. It's insane
Qeltar_ | 9 hours ago
I've seen a lot of comments talking about the timing of rate hikes relative to the midterms, and I have to admit that I don't see the immediate connection. If they hike by 50 in October, how does that immediately affect people who are voting a week later?
eamus_catuli | 9 hours ago
A rate hike carries a symbolic meaning beyond its functional purpose. It's an official recognition that inflation is high. A large rate hike is a recognition that inflation is dangerously high. A large, unexpected rate hike is as close as you'll get to an official "everybody panic" sign from what has - for the last few decades - become a very conservative (small c) and slow-moving Fed.
Not to mention the impact it has in people's 401(k) balances in the short term.
Qeltar_ | 9 hours ago
Given the financial state and economic literacy of the average American voter, the last point about the 401k seems like the only one that is germaine. Even then, I don't see a rate hike triggering some sort of massive stock market crash or anything else that's going to have a big impact in only a handful of business days between the Fed and election day.
I hope I'm wrong, to be honest.
cheddarben | 8 hours ago
I think there is a possibility that the media starts reporting on how the rates are going to start impacting financing for AI infrastructure and capital expenditures, which could stoke a lot of fear, particularly since so many are "diversified" into funds that are largely ai and tech. Yeah, the large ones are going to be safe if they are self funded or funded from a hyper scaler, but there are definitely some weak links that could start a domino effect.
If a silicone bank situation happened today, I gotta imagine it would cause all sorts of chaos.
Qeltar_ | 8 hours ago
I agree that it's possible, I just don't think it's very likely.
cheddarben | 8 hours ago
yeah, the timeline is preeeeetty tight.
Qeltar_ | 8 hours ago
Yeah. Though TBH I don't think they're raising 50 either.
Relative_Average758 | 8 hours ago
Typically, rate hikes increase the risk-free rate of return, and large funds seek to maximize return with the least risk, it states what ration in the prospectus , that balancing creates forced selling of stocks. Which causes markets to drop. Which hits 401ks pretty much immediately.
I say typically, because markets have been deeply irrational around AI stocks, so take it with a grain of salt.
Qeltar_ | 8 hours ago
Okay but almost nothing happened the last time they hiked.
dust4ngel | 4 hours ago
if you can get 6% with no risk, a lot of fish are going to bite
Momoselfie | 6 hours ago
Yeah most voters probably don't even know what a rate hike is.
dust4ngel | 4 hours ago
agree, the people who think tariffs are going to make eggs cheaper don't understand the fed's influence on the economy.
TimSylvester_ | 7 hours ago
"Yeah well but Biden... (indecipherable mumbling)"
-XanderCrews- | 7 hours ago
If only they voted on this stuff. But they don’t. Can you offer up a televised public execution? Maybe offer some free monster or coors?
eamus_catuli | 7 hours ago
They absolutely vote on inflation. Especially when caused by energy prices.
RIP_Soulja_Slim | 9 hours ago
Keep in mind it’s producer prices, so this isn’t inflation as it’s recognized in actual products/services consumed, but rather an upstream figure. There’s a strong relationship between the two, but it’s not a 1 for 1 thing, so a 6% push in PPI might only end up being a 3% push in inflation. Over long periods of time the two track well, but that’s measured in years.
The sentiment is still accurate though, hot figures like this certainly add more data in the column for hiking vs not.
swallowsnest87 | 9 hours ago
However, any difference between the two is eating into the retailer's bottom line which will have a cumulative effect on earnings and the wider stock market. Or at least that is my understanding.
RIP_Soulja_Slim | 8 hours ago
Yes and no, over time yes. But PPI fluctuates more, and that volatility is generally absorbed through the production channel, so it doesn't translate directly to CPI. There's some research in my other comment if you'd like.
HowdyDiarrhea | 6 hours ago
I thought he was just saying this will affect earnings, not CPI
RIP_Soulja_Slim | 6 hours ago
Could be any number of things, might be earnings, might result in suppressed wage costs, might be accounted for elsewhere, might just average out across time, there's a lot of moving parts here.
HowdyDiarrhea | 5 hours ago
Fair enough, but I was also just pointing out that I didn't think that guy was talking about CPI when you replied to him. Still all good info from you though.
RIP_Soulja_Slim | 5 hours ago
Oh I got you - where they said “any difference between the two” was referring to the spread between CPI and PPI over time, as in if producer prices don’t result in end user inflation they result in lower profits.
HowdyDiarrhea | 4 hours ago
Yes exactly. Seemed reasonable enough but all your points are still relevant and informative.
CornerOne238 | 9 hours ago
Please. What do you think producers will do to preserve the bottom line? It may not be immediate but there will be consumer price creep to compensate.
gimpwiz | 7 hours ago
That's what he said. Not immediate, but "over long periods of time the two track well."
RIP_Soulja_Slim | 8 hours ago
I guess I'm not sure what about my comment left you with the opposite impression? That's directly what I said, but it's also not a 1 for 1 relationship, so basic hikes on the magnitude of PPI is not what the Fed will be doing.
Here's some relevant research if you're interested in learning more about the relationship: https://nhsjs.com/2026/evaluating-ppi-as-a-leading-indicator-of-u-s-cpi-inflation-evidence-from-lagged-regression-models-1947-2025/
>Returning to the hypothesis stated in the introduction, that PPI is a leading predictor of CPI at a measurable time lag, the evidence supports it only partially. A leading relationship is statistically detectable. Both PPI lags are significant under HAC standard errors (p = 0.003 and p = 0.022) and BIC selects a short lag structure of two months, which is consistent with a genuine but brief lead. What the evidence does not support is the practical strength implied by the original framing. PPI alone cannot forecast CPI out of sample at all (Model B, R² = −0.56), and adding PPI to a model that already knows recent CPI produces an improvement of about 2% in RMSE that a formal test of equal predictive accuracy cannot distinguish from zero (p = 0.53). A statistically detectable in-sample lead and a useful out-of-sample forecasting gain are therefore not the same thing, and this study finds the first without the second.
TLDR is that while it's correlated across time, it's predictive power in the near term is inconsistent but useful at times. All that means is it's important data, but that economists would not base a more aggressive hike on a hot PPI alone.
Mackinnon29E | 4 hours ago
I think it's insane how these MAGA can claim California is so expensive all while voting to increase the price of everything in every state by an absurd degree for 4+ years. As these price increases will remain...
Beepbeepimadog | 8 hours ago
The issue is that so much of the spending is seen as required by the major borrowers (governments, AI buildout) that rates are only going to increase inflation in the short term since that borrowing cost gets passed to consumers.
gravescd | 8 hours ago
Diluting the returns on AI cap ex will cause pain. There is so much money riding on returns from physical buildouts that don't even have approved sites.
hopefuldonkeykick | 4 hours ago
Bah gawd that's Volcker's music!
bikemandan | 7 hours ago
Just watched this yesterday https://www.youtube.com/watch?v=9eBM5IF_bco Interesting theory I thought; the gist being that the AI boom is unstoppable (ie the companies refuse to stop and will eat any increase in borrowing cost). Therefore the rate increases that are meant to curtail this activity end up only impacting those behind the AI players
Financial_Wish_6406 | 6 hours ago
Yeah these labs are not stopping, no matter what. The tech is already too useful, and it keeps getting better.
dust4ngel | 3 hours ago
> these labs are not stopping, no matter what
the issue is that this is existential - the winner is going to own everything, and the losers will all die.
Financial_Wish_6406 | an hour ago
Agreed
Major_Break4970 | 9 hours ago
They can't raise. The economy is weak. Stagflation is here. Buy gold and silver. 1970s repeat
shadowboxer47 | 2 hours ago
>The economy is weak. Stagflation is here. Buy gold and silver. 1970s repeat
Yall have been saying this literally every day of my life and I am 42.
mist_kaefer | 9 hours ago
Who could have predicted that the highest diesel price ever in the US would lead to a significant increase of the producer price index.
Maybe they should leave off the cost of transporting goods for the next PPI reading, similar to how food and energy aren’t in the core CPI reading.
kronikfumes | 9 hours ago
But don’t worry the 300,000 metric tons of Russian diesel for October will save us! What’s that, that’s only enough for about 15 hours of US consumption? Well surely the November shipment of 500,000 metric tons will save the day! What? That’s only about 1 full day of US consumption?
This administration is a fucking joke
Relative_Average758 | 8 hours ago
Our Russians ‘ally’ really needed that $6b.
OkStop8313 | 6 hours ago
We're debasing ourselves and betraying our allies...for like three days of gas spread out over months.
What
The
Fuck
whomad1215 | 6 hours ago
gas from russia
that is probably originally from iran
EffectivePatient493 | 5 hours ago
We can skip the probably, we can see the Russian refinery fires from orbit. What a neat coincidence that when we bombed Iran's refineries we forgot to bomb the ones that export along the Caspian sea to Russia.
Russia is now a net importer of refined petrochemicals, you better believe that if they start exporting some it'll cause more imports from Iran.
We're indirectly buying diesel from Iran, this administration is committed to having American tax dollars spent to... bomb American tax dollars. While being shot at, by American tax dollars.
Jimbobsupertramp | 7 hours ago
I don’t think this is even from diesel yet which is the scary part. This is the tariffs finally trickling down. The pain from the diesel shock is gonna make this look like a HUGE discount
TimSylvester_ | 7 hours ago
If inflation is too high just leave out the numbers that change too much, or "replace" one measure for another. It's fine, nobody will notice.
TGAILA | 9 hours ago
You don't have to be an economist to know that whenever there is a geopolitical conflict in the Middle East, particularly a war in Iran, it definitely impacts oil prices. The economic ripple effect is predictable. Logistics transportation and farmers need diesel fuel for their business operations. Those expenses are passed on to customers at the grocery store (you see a higher grocery bill), and inflation refuses to go away quietly.
RIP_Soulja_Slim | 9 hours ago
As always, rather than reading articles I very much implore people read the actual reports - that way you can skip CNBC’s stripped down for dumb people reporting and get full context: https://www.bls.gov/news.release/pdf/ppi.pdf
> The Producer Price Index for final demand increased 1.3 percent in September, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices moved up 0.5 percent in August and 0.2 percent in July. (See table A.) The September increase is the largest advance since rising 1.7 percent in March 2022. On an unadjusted basis, the index for final demand climbed 6.3 percent for the 12 months ended in September, the largest 12-month increase since moving up 6.4 percent in December 2022.
Something of note, the headline figure is obviously grabbing a lot of attention - but what I’ve got my eye on, and what IMO is the most important for understanding long term actual inflation trends (vs energy volatility) is page 13 of this report, the last entry is Final Demand less food and energy, IE Core PPI (it’s not published as prominently as CPI/PCE, that came in at 0.7% month over month. That’s a wild increase, especially in core measures. This is as clear a signal as anything that there’s still significant inflationary pressure downstream.
I won’t profess to know where the aggregate Fed board is leaning, but IMO despite calming PCE figures the hotter CPI print combined with this print coming in very hot make for a fairly compelling case to hike again in October.
It should be noted at least three board members expressed sentiment that they were leaning towards a pause in October, but all of this was prior to both the CPI and PPI releases, with new data comes new outlook. We’ll see.
RIP_Soulja_Slim | 9 hours ago
Some other excerpts:
>In September, prices for final demand goods rose 2.6 percent, and the index for final demand services advanced 0.8 percent.
>Prices for final demand less foods, energy, and trade services moved up 0.5 percent in September after increasing 0.3 percent in August. For the 12 months ended in September, the index for final demand less foods, energy, and trade services rose 5.0 percent.
>Final demand goods: Prices for final demand goods advanced 2.6 percent in September, the largest increase since data were first calculated in December 2009. Over 80 percent of the broad-based rise in September is attributable to the index for final demand energy, which jumped 10.8 percent. Prices for final demand foods and for final demand goods less foods and energy advanced 1.2 percent and 0.3 percent, respectively.
>Product detail: Half of the September increase in the index for final demand goods can be traced to prices for gasoline, which jumped 20.3 percent. The indexes for diesel fuel, fresh and dry vegetables, jet fuel, residential electric power, and crude petroleum also rose. In contrast, prices for chicken eggs dropped 39.7 percent. The indexes for thermoplastic resins and materials and for commercial electric power also declined. (See table 2.)
>Final demand services: Prices for final demand services moved up 0.8 percent in September, the largest rise since advancing 0.8 percent in April. Nearly half of the broad-based September increase can be attributed to a 1.4-percent rise in margins for final demand trade services. The indexes for final demand transportation and warehousing services and for final demand services less trade, transportation, and warehousing also advanced, 3.4 percent and 0.3 percent, respectively.
>Product detail: Over 20 percent of the September increase in prices for final demand services can be traced to margins for machinery and vehicle wholesaling, which advanced 3.9 percent. The indexes for truck transportation of freight, food and alcohol wholesaling, traveler accommodation services, food retailing, and airline passenger services also rose. Conversely, margins for automotive fuels and lubricants retailing dropped 30.3 percent. The indexes for securities brokerage, dealing, and investment advice and for chemicals and allied products wholesaling also fell.
AptitudeSky | 9 hours ago
Thanks for summarizing the reports. I think there are many people myself included who don’t have the time or full know how to consistently pull , read, and understand the underlying data/reports.
RIP_Soulja_Slim | 8 hours ago
For what it's worth, almost all of these reports follow a similar cadence - the first paragraph or two are broad summaries of headline data, the next few typically discuss sub groups and what underlying factors were the largest contributors.
After that you start getting piles and piles of data in spreadsheet type form.
All a news org does is cherry pick one or two points from the top paragraphs, throw that in an article, then add something necessary for whomever's clicks they're trying to gather. So you can ingest the summaries from these agencies in the same time that it takes to read an article, and it's usually just as easily accessible.
etc_etc_etc | 9 hours ago
Just wanted to say thanks for all your contributions on this sub. I know a lot of people pick fights with you, but I appreciate your reasonable approach and consistent reliance on data. It’s one of the highlights of reddit for me and has helped me understand a lot of the batshit insanity of the last 2 years better. So thank you!
RIP_Soulja_Slim | 8 hours ago
Thanks man, I appreciate it haha.
Oryzae | an hour ago
I’m one of the folks that has fought with you before but I echo etc’s sentiment. I’ve been going straight to the source more and more lately and sifting out sensationalism
CornerOne238 | 9 hours ago
Yep. Energy is not a standalone entity, it trickles down into everything.
Already-Price-Tin | 8 hours ago
It does, but it also trickles over in different ratios depending on the energy consumption correlated with the production of that final product. Logistics/transportation, including passenger transportation like commercial flight and taxis/Ubers, are obviously very sensitive to fuel prices. Other human labor intensive services, like legal services, may not be quite as sensitive to energy prices.
That might make for shifting ratios of the cost of one product to another product.
Suitable-Economy-346 | 8 hours ago
I wonder if we're ever going to take antitrust seriously again. The monopolization of everything in the economy is bleeding us dry and no one is doing anything about it. Whenever there's any sort of supply shock or more money in the economy, there's no competition so companies just jack their prices up to unjustifiable amounts and blame whatever the news of the day is. Biden's administration did cute little things here and there but wasn't serious at all, and now there's essentially no antitrust enforcement or legislation anymore. This is really bad and no one is doing or even saying anything about it except a sprinkle of progressive politicians here and there who have no power to do anything.
Lucky_Dragonfruit_88 | 7 hours ago
Not looking good since we traded a Khan for a con
OrangeJr36 | 7 hours ago
Antitrust enforcement might help competition and workers rights, but it won't touch inflation brought on by energy prices driven up by completely unnecessary wars.
semisolidwhale | 7 hours ago
It would affect the ability of the politicians driving those results to be elected/reelected in the first place. When they only need to curry favor with a select few and can ignore everyone else, bad/stupid shit happens at a higher and more intense frequency.
Mundus_Vincendus | 2 hours ago
Are these wars caused by monopoly capitalism needing resources and neocolonial proxies to export capital and industry to?
Suitable-Economy-346 | 7 hours ago
The inflation wouldn't be as high even with horrific domestic and foreign policy. There are even very few economists taking the monopolization of everything seriously. We're in end times.
dispatch00 | 6 hours ago
I'm glad you could fit Biden's name in there; great job. He's surely to blame, and not Trump.
Trump could’ve just pretended to be president, golfed all day, and taken credit as the beneficial Biden’s policies were unfolding. Instead he fucks it up.
These are all conservative outlets praising Biden’s 2024 economy:
The Hill — June 11, 2024 “World Bank: Impressive US Economy is Powering the World”
The Economist — October 19, 2024 “US Economy: The Envy of the World”
The Wall Street Journal — October 31, 2024 “Next President Inherits a Remarkable Economy”
Were_all_dead_anyhow | 5 hours ago
Parallel pricing and tacit collusion are structural. The shareholders that elect board who dictate/execute corporate governance don't want to compete. Everyday people do not understand how they feed into this system.
Asset managers act as fiduciaries for everyday investors, but people overlook the structural power created when millions of individual accounts are aggregated into blocks of voting shares. Corporate executives are acutely aware that a handful of mega-funds control 10% to 20% of their company’s voting power alongside identical stakes in their top competitors. Because index funds cannot sell underperforming stocks, their ultimate fiduciary duty is to maximize the value of the entire index/fund, which structurally removes the incentive to support aggressive price wars that would shrink overall industry profitability.
When a customer buys a share in an index fund or ETF, they don't really own the underlying and the assets within that wrapper are held in the custody of the asset manager, The asset manager uses the cash to buy the actual stocks, places them in their own institutional custody account, and retains 100% of the legal shareholder rights. The asset manager is the legal owner of record on the company's books, they possess the voting power that shapes corporate boards and executive behavior. While the customer holds the economic right to the index's financial returns, they have completely outsourced the structural power to the asset manager.
This happens across the market though; You and I could own shares in funds with "competing" companies through Vanguard, but because Vanguard has a fiduciary duty, they wouldn't want to overtly support corporate action of one company waging a price war against the other because it devalues the fund.
Tacit collusion and parallel pricing occur legally because corporate leadership naturally adapts to the structural math of common ownership without asset managers ever having to issue explicit commands. The institutional voting blocs elect boards of directors who design executive compensation tied to relative TSR or peer groups in the same industry. A CEO's personal wealth and bonuses are maximized by keeping pace with the industry; a destructive price war would collapse overall market margins, tanking their own company's stock value alongside its rivals and wiping out their compensation. Corporate leaders then selfishly/naturally lean into a strategy prioritizing capital discipline, stock buybacks, and stable pricing over aggressive, risky market expansions. This effectively maintains industry-wide profitability while legally shielding asset managers under the cover of aligning executive pay with long-term shareholder value.
EDIT: I have been called dumb, idiotic, a liar, etc. for articulating this concept on here before, so if you do feel that way, I would love for you to mechanically explain how this is incorrect.
devliegende | 2 hours ago
I think you're missing something crucial. Wholesale prices are what businesses pay for their inputs and if it is higher than CPI it means margins are being squeezed.
Or in more simple terms. Companies have not yet "just jack their prices up"
Suitable-Economy-346 | an hour ago
We see the greatest monopolization further from the consumer.
devliegende | 17 minutes ago
In that case wholesale inflation should be lower than retail inflation. It is not.
TimSylvester_ | 7 hours ago
We'll tackle antitrust after the revolution that replaces a government of the wealthy with a government for, of, and by the people.
We could tackle it before, but, well, people donate a lot of money to campaigns to ensure otherwise.
DMV_Local | 5 hours ago
The hits keep coming for this incompetent narcissist who wants us all to commit national along with him. He is morally bankrupt and puts himself and his corrupt family above our national interest at every turn.
May he reap all that he's sown. All we can do now is limit the damage until he is forced to leave office.
ripChazmo | 9 hours ago
Is everyone tired of winning yet? The rest of this is just added bullshit because I need to have a minimum character response. Getting really tired of this.
wrongwayup | 3 hours ago
The terminology here is really awful. It is not a "gain", it is a loss in value of the dollar. There are few people or institutions who see inflation as a good thing on its own.
jayr114 | an hour ago
So it hasn’t hit consumers yet. This is essentially just the cost of gas filtering through the economy. Wholesale prices went up because the cost of transportation skyrocketed. Those prices will transfer to the shelves pretty soon.