Hot April PPI dims Fed rate-cut hopes as energy costs spread through supply chain

U.S. producer prices rose far more than expected in April, prompting Wall Street analysts to warn that oil-driven inflation pressures may keep the Federal Reserve from cutting rates in 2026. The Bureau of Labor Statistics said on May 13, 2026, that the producer price index rose 1.4% month over month and 6.0% from a year earlier, the largest increase since 2022. Core PPI climbed 1.0% on the month and 5.2% annually. U.S. stocks opened mixed after the report, while Treasury yields remained elevated. Analysts said the data showed energy costs tied to the Iran war and Strait of Hormuz risks spreading into transportation, services and manufacturing. Gasoline prices have risen 15.6% this year, adding pressure on corporate margins and increasing the risk of pass-through to consumers. Several strategists said the report makes a near-term Fed pivot less likely under Chair Kevin Warsh, with markets reassessing expectations for rate cuts as inflation pressures broaden beyond energy.