Producer prices foretell future inflation

 Fox Business:

Producer prices soared by 9.7% in December, biggest gain on record 
The producer price index measures inflation at the wholesale level before it reaches consumers
...

The eye-popping reading – which marked the seventh consecutive month the gauge has been above 5% – will likely amp up pressure on the Federal Reserve to begin hiking interest rates as soon as March in order to combat the recent price surge. Hiking interest rates tends to create higher rates on consumers and business loans, which slows the economy by forcing them to cut back on spending.
...

Inflating the cost of borrowing money is supposed to reduce borrowing and lead to less inflation as the economy slows.   It is a painful process for producers and consumers.

See, also:

Ron Johnson on Inflation: ‘This Didn’t Just Happen — This Is Caused by Democrat Policies’

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