U.S. October PPI Rises 6.5% YoY, Highest in Nearly Four Years
43 pointsby moonyptoan hour ago3 comments
  • 20 minutes ago
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  • toomuchtodoan hour ago
    Fed rates and bond market rates going up.

    https://blog.sentinel-team.org/p/special-report-rising-bond-...

    https://www.cmegroup.com/markets/interest-rates/cme-fedwatch...

    https://www.ustreasuryyieldcurve.com/

    • dv_dt12 minutes ago
      Is the theory still sound for raising rates to control inflation under these circumstances? Not completely unsound, but I think less effective when inflation is driven by energy prices, than when the inflation is driven more by financialization.
      • toomuchtodo8 minutes ago
        It's a great question. The Fed cannot print more oil, and so any efforts to reduce energy inflation with interest rates is going to be futile. Fiscal policy must step in (Congress) to both stabilize the oil market and accelerate our transition off of oil (which would prevent energy inflation in the future).

        Fundamentally, due to structural demographics, we have arrived at a capital shortage period after a long capital surplus period [1]; there will be, for long into the future, more projects chasing a shrinking supply of capital. This will continue to push interest rates up, which will also drive asset prices down (real estate, private equity, etc) [2].

        Tangentially, about a year ago, I predicted that the Fed could beat on the economy all it wants with higher rates and this would not cause mass unemployment, because the world is rapidly aging and how fast workers are retiring out of the labor force [3]. This thesis appears to have been proven accurate, but more time is required to make the thesis more durable.

        [1] https://www.apollo.com/wealth/insights-news/insights/daily-s...

        [2] https://news.ycombinator.com/item?id=50329344

        [3] https://news.ycombinator.com/item?id=44392820

        • JumpCrisscross4 minutes ago
          > any efforts to reduce energy inflation with interest rates is going to be futile

          Raising rates makes credit more expensive. That cools down growth. That, in turn, eases resource demand (as a function of the resource intensity of GDP).

          Practically speaking, higher rates today would mean less borrowing to build datacenters. (And new homes, et cetera.) Which would mean those marginal resources going to other uses. Which would ease price pressure.

          > there will be, for long into the future, more projects chasing a shrinking supply of capital

          Capital is priced in rates. Too many projects chasing too little capital will drive rates up until the capital markets balance.

          And current spreads indicate a surplus of capital [1]. That's why we're seeing e.g. multi-trillion dollar IPOs.

          [1] https://www.macrotrends.net/3229/us-high-yield-bond-spread

        • eqmvii6 minutes ago
          > The Fed cannot print more oil, and so any efforts to reduce energy inflation with interest rates is going to be futile

          Doesn't increasing interest rates reduce demand though? So they can't print more oil, but they can reduce the attractiveness of investments that will require oil, thus indirectly driving prices down?

      • hgomersall4 minutes ago
        It's not sound no, and never really was given how doggedly the policy has been stuck to. The policy amounts to handing out wadges of cash to people with money, then ignoring that bit and hoping the hardship suffered by those that need to borrow will offset the activity of the people with interest income. At best, it's weak sauce compared to actual fiscal policy.
      • 150g29 minutes ago
        [dead]
    • laweijfmvo15 minutes ago
      the Fed decided not to vote on rates this month
      • derektank4 minutes ago
        They decided to not vote on rates in October, but they moved up the December meeting to November.

        https://www.cnbc.com/2026/11/12/in-policy-switch-fed-says-it...

      • toomuchtodo14 minutes ago
        Impacts short term rates, bond market controls longer term rates (10Y-30Y). Bond market prices in inflation forecasts regardless of what the Fed does from a pricing and yield optimization perspective, so inflation data reporting goes directly into bond market movements.
  • ungerr13 minutes ago
    sick\

    how did it