Wall Street is mixed after pickup in wholesale inflation

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producer price index, which measures inflation before it hits consumers, rose 0.8% last month from July 2022. The latest figure followed a 0.2% year-over-year increase in June, which had been the smallest annual rise since August 2020. While modest, the increase in wholesale prices last month could help persuade the Federal Reserve that its work on bringing inflation to heel isn’t done.

“Not surprisingly, today’s report offers the hawkish wing of the Fed more ammunition to advocate for another rate hike before the Fed is convinced it’s reached its terminal rate," said Quincy Krosby, chief global strategist for LPL Financial. Bond yields mostly rose, including the two-year Treasury yield, which climbed to 4.88%. The yield, which closely tracks expectations for the Fed, had been at 4.80% right before the report’s release.

The yield on the 10-year Treasury rose to 4.16% from 4.10% late Thursday. It helps set rates for mortgages and other important loans. The majority of traders on Wall Street are still betting the central bank will make no change to the fed funds rate at its policy meeting next month, according to data from CME Group.

Even so, the bond market’s reaction is a signal that investors think the Fed will probably raise interest rates, said Sam Stovall, chief investment strategist at CFRA. “Investors are still sort of weighing, ‘will they or won’t they in September?’" he said. "Uncertainty abounds." The wholesale prices data follows Thursday’s release of the government’s consumer price index, which showed U.S.