✅ Quick Take on U.S. Producer Inflation Data 🔹 Five-year inflation expectations have climbed from a more normal 2.2% to 2.7%, suggesting inflation pressures are starting to build again rather than cool. 🔹 Combined with the recent CPI print, today’s PPI data likely points to a stronger PCE reading ahead — the inflation metric the Federal Reserve watches most closely. 🔹 Markets are now pricing in a much more hawkish Fed path, with expectations shifting sharply toward tighter policy rather than near-term easing. That creates a difficult backdrop for Kevin Warsh, especially if inflation momentum keeps accelerating. 🔹 For Trump, this is also a challenging setup. He has repeatedly pushed for lower rates, but with inflation reaccelerating, that argument becomes harder to defend. The only realistic bullish macro narrative may be rapid AI-driven economic expansion offsetting the drag from higher borrowing costs. 🔹 Energy remains the wildcard. If geopolitical tensions ease and oil prices fall — particularly with smoother supply flows through key routes like Hormuz — inflation pressure could cool faster than expected. Until then, energy remains a major upside risk. 🔹 Fed speakers will also be in focus. While some officials are not expected to directly address the economy, Austan Goolsbee is scheduled to speak multiple times today. He already raised concerns about services inflation, so markets will be listening closely for any further hawkish signals. Bottom line: Hot CPI + hot PPI = more pressure on the Fed, less room for rate cuts, and potentially higher volatility across risk assets. #USCPIHits3.8%