- PPI inflation highest since December 2022.
- All measures place considerably above expected levels.
- EUR/USD reaction very muted.
- FOMC rate hike by year-end roughly 40% priced-in.
- PPI inflation highest since December 2022.
- All measures place considerably above expected levels.
- EUR/USD reaction very muted.
- FOMC rate hike by year-end roughly 40% priced-in.
The April reading has shown the sharpest increase in producer prices since 2022. The increase is, naturally, largely due to higher petrol prices. That said, the core measure, stripping off food and energy, has also picked up significantly, up to 5.2%.
Figure 1: US CPI & PPI Inflation (2018 - 2026)
Source: XTB Research, 13.05.2026
All of the readings represent a major upward surprise, placing considerably above expected levels.
- PPI Inflation [YoY]: 6.0% (vs. 4.8% consensus)
- PPI Inflation [MoM]: 1.4% (vs. 0.5%)
- Core PPI Inflation* [YoY]: 5.2% (vs. 4.3%)
- Core PPI Inflation* [MoM]: 1.0% (vs. 0.3%)
- Super-Core PPI Inflation** [YoY]: 5.2% (vs. 4.3%)
- Super-Core PPI Inflation** [MoM]: 1.0% (vs. 0.3%)
* Excluding food and energy.
* Excluding food, energy and trade services.
A 3% monthly increase in airfares is perhaps the most striking when looking at detailed data. Some categories have, however, surprised to the downside, with hospital care up roughly 0.1% MoM and portfolio management down 2.4%.
Figure 2: US PPI Inflation and WTI Oil (2012 - 2026)
Source: XTB Research, 13.05.2026
The reaction of the EUR/USD is, rather surprisingly, very muted, with the pair flat after the release and down 0.3% on the day, likely due to little to none positive information regarding the developments in the Middle East. We also see very timid swings in S&P 500 futures.
Markets slightly increased their bets for FOMC interest rate hikes, such a move happening before the year-end is still not the base scenario, however (roughly 40% priced-in). We have also seen a further pick-up in US 10-year bond yields, up to 4.48%, not seen since July.
—
Michał Jóźwiak
Financial Markets Analyst at XTB
michal.jozwiak@xtb.com
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