The PPI measures inflation on the wholesale level, meaning prices wholesalers sell to other producers or retailers. When raw material or supplier prices rise for businesses, they often raise their own prices, passing their increased costs on to consumers. That could mean regular shoppers like you and me are going to have to keep paying more for goods when we go to the store. This isn’t a great sign for tomorrow, when the Consumer Price Index (CPI) is released and shows how much inflation is hitting goods and services for the rest of us. If CPI shows that inflation isn’t slowing down, it’s likely that the Federal Reserve won’t slow the pace of its aggressive rate hikes in its fight against inflation. As the Fed raises rates, borrowing for consumers and businesses becomes more expensive. Already, mortgage rates are edging closer to 7%, according to the Mortgage Bankers Association, which said the average rate on a 30-year fixed-rate hit 6.81% in the latest week ended Oct. 7, its highest level since 2006.
