Inflation Fears Spike To 30 Year Highs

Hidden deep in the narrative-busting Philly Fed survey plunge this morning was an alarming data point that may better explain the slump in stocks than mere disappointing headlines would suggest.

While Prices Paid and Prices Received both rose modestly (even as New Orders and Backlogs plunged), it appears Trump Trade Tariffs have sparked a Daimler-esque response in the business-people of Philadelphia who are now more worried about inflation in the next 6 months than at any time since 1988 (shooting up a whopping 23 points to 56.6)…

But what the chart says is more concerning for the average joe as this is the bank’s six-month outlook index for prices received by producers – in other words: what consumer prices are expected to do.

While the gauges are volatile and expectations often differ from reality, Bloomberg notes that the increase is consistent with the trend of budding cost pressures and shows manufacturers are going to test the end-market’s tolerance of higher prices.

So, should Treasury yields be anxious about this? You decide…

As MacroTourist Kevin Muir retorted previously: “It’s foolish to believe that the end-game is anything but inflation.”