The U.S. inflation problem is getting worse

Data: Bureau of Labor Statistics; Chart: Neil Irwin/Axios America's inflation problem is getting worse, not better, as 2026 progresses. New wholesale price data — on the heels of Tuesday's consumer price report — confirm it. Why it matters: The evidence of continued price pressures stretches far beyond the energy price spike that occurred following the Iran war, and suggests ongoing pressures across a range of goods and services. It is getting harder and harder to chalk up the inflationary impulse evident in a wide range of data solely to the one-time effects of tariffs and the blockade of the Strait of Hormuz. That makes the chance of a Federal Reserve interest rate cut at any point this year increasingly remote, barring a stark turnabout in the inflation trend or labor market conditions. By the numbers: The Producer Price Index for final demand rose 1.4% in April alone, and is up 6% over the last 12 months. Even excluding volatile food, energy and trade services, the index was up a whopping 4.4% over the last year, the highest 12-month increase since 2023. Prices for services were up significantly, thanks to a 5% rise in transportation and warehousing prices — a sign that higher fuel prices are already having second-order effects on what it costs for other goods. What they're saying: "[Wednesday's] report suggests that while the move higher in prices received by producers is primarily being driven by energy, we are also seeing a broader increase across other core components of the inflation basket," analyst Richard de Chazal of William Blair wrote in a note. State of play: As Kevin Warsh prepares to take charge of the Fed, the economic environment is simply not cooperating with President Trump's desire for further interest rate cuts. Many of Warsh's soon-to-be colleagues are warning that the next policy move could be a rate increase. "I believe it will likely be important to maintain the current slightly restrictive monetary policy st...

Original source: Axios