Prices Paid to US Producers Rise on Goods, Services Costs

Producer price index rose 0.7% in February (vs 0.5% in January), an unexpected acceleration in US wholesale inflation driven by higher goods and services costs. The surprise uptick heightens upside inflation risk and could reinforce expectations for tighter Fed policy, putting upward pressure on bond yields and weighing on risk assets.

Analysis

Producer price index rose 0.7% in February (vs 0.5% in January), an unexpected acceleration in US wholesale inflation driven by higher goods and services costs. The surprise uptick heightens upside inflation risk and could reinforce expectations for tighter Fed policy, putting upward pressure on bond yields and weighing on risk assets.