PPI for Dec up 0.9% on energy

Marketwatch reports:

This is the largest gain since September.

However, excluding food and energy costs, the core PPI rose a modest 0.1%. Read the full report.

Economists were expecting the December PPI to rise 0.5% and the core rate to rise 0.2%. See Economic Calendar.

The PPI fell 0.7% in November, while the core PPI had risen 0.1%.

For all of 2005, the PPI has risen 5.4% the largest calendar year increase since 1990.

That means for 2005 real interest rates were negative.Look at the present yield curve.Do you want a yield in the 4% handle when PPI is in the 5% handle? This points most directly to higher rates no matter what the Fed Chairman wants.