Latest / The Macro Memo with Fexingo: Daily Conversations on Inflation, GDP, and Federal Reserve Policy
Why Wholesale Inflation Is the Fed's Real Headache Now
The May CPI print hit 4.2%, but the bigger story might be the wholesale inflation surprise. Producer prices rose 1.1% in May, driven by a surge in energy costs tied to the Iran conflict. Lucas and Luna break down why this matters for the Fed's next move, how the ECB's rate hike complicates the picture, and why the bond market's breakeven inflation rate is telling a different story. They also look at how small businesses are getting squeezed by input costs that aren't showing up in consumer inflation surveys yet. Specific numbers, real economics, no hot takes…
The skinny
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