US PPI Reaches 5.4% on Energy Surge, Pressuring Cryptocurrencies
Rising diesel costs pushed US producer inflation to 5.4% in August, lifting Treasury yields and weighing on risk assets.
US producer prices increased 0.4% in August compared to July, taking the year-on-year rate to 5.4%, slightly above market forecasts of 5.3%. The reading triggered an immediate rise in the 10-year Treasury yield toward 4.9%, dampening risk appetite across technology equities and the cryptocurrency market.
Energy costs surged 4.2% during the month, driven primarily by a 24.1% jump in diesel, which accounted for more than a third of the rise in final demand goods prices. In contrast, core PPI excluding food and energy rose 0.2% on a monthly basis, coming in below the expected 0.3%, and 4.6% year-on-year.
The report indicates that inflationary pressures were largely concentrated in energy rather than reflecting a broad-based acceleration. Nonetheless, elevated yields continue to complicate monetary policy considerations ahead of the upcoming consumer inflation print.
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