Inflation Dominated Last Week, but Nvidia Is This Week’s Big News

The Nvidia office building in Santa Clara, Calif., on May 31, 2023. Jeff Chiu/AP Photo

Commentary

Last week was all about inflation. On Tuesday, the Labor Department announced that the Producer Price Index (PPI) rose by a stronger-than-expected 0.5 percent in April and 2.2 percent in the past 12 months. April’s core PPI, excluding food, energy, and trade, rose 0.4 percent and 3.1 percent in the past 12 months. Although this was substantially higher than the economists’ consensus expectation, the details were encouraging. The March PPI was revised lower, to a -0.1 percent decline, while wholesale service costs rose only 0.1 percent in April. About 75 percent of the April rise was due to a 5.4 percent increase in gasoline prices. Since there is little the Fed can do about global energy prices, this should not change how the Fed views any future interest rate cuts.