Producer Price Index Reminds Investors That Inflation Is Still A Problem

Producer Price Index Reminds Investors That Inflation Is Still A Problem

Despite the positive moves in stocks, investors continue to buy up Treasuries—pushing prices higher and yields lower. The 30-year Treasury Index (TYX) is down almost 5% in the last four days. The latest Consumer Price Index (CPI) was released in September and measured inflation at 5. 4% for the year. The 30-year Treasury yield closed Monday at 1. 88%. This means investors are getting a real yield of -3. 52% (1. 88-5. 4) which is why the bond buying is perplexing. The inflation picture is still pretty bad according the October Producer Price Index (PPI) that was released this morning. Inflation at the producer level is up 8. 6% over the year and up 0. 6% from September to October. Many producers have been able to shield consumers from rising costs, but eventually something may have to give. The October Consumer Price Index (CPI) comes out Wednesday. Outside of inflation, The Wall Street Journal is reporting that General Electric GE (GE) has announced plans to break up into three different companies focusing on aviation, health care, and energy. The once symbol of American manufacturing has struggled in recent years and has sold off parts of its business to try and