The Labor Department reported on Wednesday that the Producer Price Index () rose 1.4% in April and 6% in the past 12 months. The , excluding food, energy and trade services, rose 0.6% in April and 4.4% in the past 12 months. Wholesale food costs rose 0.2% in April, while wholesale energy costs surged 7.8%. The big problem with the PPI was that the wholesale goods costs rose 2%, while wholesale service costs rose 1.1%, so the inflation on the wholesale level is embedded and will likely persist.
rose after the PPI, so Treasury Secretary Scott Bessett is going to have his hands full, since the yield curve is getting flatter. Obviously, the cannot cut key interest rates while Treasury yields rise, so if this gets worse, Treasury Secretary Bessett and incoming Fed Chairman Kevin Warsh may have to take some extraordinary action to get yields lower in the upcoming months.
The bond vigilantes are increasingly focused on Britain after Prime Minister Keir Starmer signaled that he would not quit after the Labour Party suffered a devastating defeat in local elections by Nigel Farage’s Reform UK party. Due to this “Reformquake” that had humiliating defeats, especially in Scottish and Welsh elections, Labour MP David Smith and MP Catherine West are calling for a leadership election.
As more Labour Party MPs abandon Prime Minister Starmer, a new election is inevitable. In fact, Bloomberg reported that Health Secretary Wes Streeting is preparing to resign to challenge Keir Starmer for Labour Party leadership. In the meantime, Britain is adrift without effective leadership, so its are rising and are expected to increase economic anxieties.