New data from the U.S. Labor Department revealed that wholesale inflation accelerated to 6.5% on an annual basis in October—the sharpest yearly increase since November 2022. While the monthly Producer Price Index (PPI) rose a modest 0.3%, surging costs for electronic components (+4.2%) and industrial chemicals (+3.1%) highlighted persistent price pressures driven by massive artificial intelligence infrastructure spending. Following the report and hawkish remarks from central bank policymakers, bond markets sold off, pushing the 10-year U.S. Treasury yield above 5.13% and lifting the U.S. Dollar Index to a 19-month high as traders priced in further Federal Reserve rate hikes.
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