U.S. May PPI up 6.5% year-over-year, the largest increase in nearly three years!
Inflation out of control, is the Federal Reserve's rate hike restart a certainty?

According to the latest data released by the U.S. Bureau of Labor Statistics (BLS) this evening Taiwan time (the 11th), the U.S. Producer Price Index (PPI) for May 2026 surged to an annual increase of 6.5%, marking the largest jump since November 2022. The core PPI indicator also hit multi-year highs across the board, primarily driven by sharp increases in energy prices such as crude oil and gasoline. This wholesale inflation data, which has once again exploded after the Consumer Price Index (CPI), may force the Federal Reserve (Fed) to firmly bring "rate hikes" back into discussion.

(Background summary: U.S. inflation in May exceeds 4%! Bitcoin and gold both decline, can interest rate cuts still happen in the second half of the year?)
(Additional context: U.S. CPI in May soars to 4.2%! Energy surge as the main inflation culprit, December rate hike expectations reach 42.5%)

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• Gasoline soars 23%! Commodity costs contribute to 80% of the increase
• Core PPI hits four-year high, service transportation costs remain high
• "Rate hikes again" may become a certainty, risk assets face extreme hits

The U.S. wholesale inflation monster is experiencing a furious rebound. Following yesterday’s explosive Consumer Price Index (CPI), the U.S. Bureau of Labor Statistics (BLS) announced again at 8:30 p.m. Taipei time today a highly destructive report on the Producer Price Index (PPI) for May 2026. The data shows upstream supplier costs have shown an uncontrollable "explosive growth," with the overall PPI year-over-year increase reaching a three-year high, and the core index excluding food and energy also hitting multi-year records, signaling that inflation alerts have risen to the highest level.

Gasoline soars 23%! Commodity costs contribute to 80% of the increase

According to the BLS official press release, the final demand PPI monthly increase in May was +1.1%, and the unseasonally adjusted 12-month annual rate soared sharply to 6.5%, the largest increase since November 2022. Among them, final demand goods surged 2.8% in a single month, marking the largest increase since December 2009, and this single category contributed nearly 80% of the overall PPI increase.

The catalyst for the skyrocketing commodity costs is undoubtedly energy. The final demand energy index jumped 10.7% in May alone, with gasoline wholesale prices soaring 23.4% in a single month, and diesel, jet fuel, and other industrial chemicals also saw significant increases. Conversely, food prices rose 0.6% month-over-month, with pork prices falling 10.1% against the trend.

Core PPI hits four-year high, service transportation costs remain high

What further suffocates Wall Street economists is the stickiness of core inflation. The core PPI index, excluding food, energy, and trade services, increased by 0.8% in May, the largest monthly gain since March 2022; its annual rate expanded to 5.1%, also reaching the highest since October 2022.

In the services sector, May saw a monthly increase of 0.3%, slightly slower than April’s 0.7%, but transportation and warehousing rose sharply by 2.6%, investment management fees surged 4.8%, freight trucking, and securities brokerage fees remained high. Additionally, intermediate demand for processed and unprocessed raw materials also exploded, with unprocessed crude oil prices soaring 11.8% in a single month, and processed energy products increasing by 13.3% annually, indicating that future inflationary pressures continue to be transmitted from upstream to downstream.

"Rate hikes again" may become a certainty, risk assets face extreme hits

Against the backdrop of Middle Eastern conflict (Iran war) causing supply disruptions in the Strait of Hormuz, this terrifying PPI inflation report has completely shattered the market’s hopes for the Fed to cut rates this year. Following the European Central Bank (ECB)’s decision today to restart rate hikes by 1 basis point due to energy inflation, the U.S. has experienced two consecutive days of double blows from CPI and PPI, meaning the Fed’s core policy is no longer about "how long to keep rates steady," but rather "whether to bring rate hikes back into discussion." Under the macro shadow of potentially further rising interest rates and extreme tightening of capital costs, global cryptocurrency markets including Bitcoin and U.S. tech stocks are likely to face more intense bloodletting and collapse tests in the short term.