Inflation Nightmare Keeps Getting Worse: Producer Prices Break Out. Inflationary Mindset Rules | Wolf Street

For the past 15 months, producer prices have soared relentlessly. Five months in a row of double-digit producer price inflation is quite something. And the breakout today is remarkable.

What companies all along the supply chains have figured out is that they can pass on cost increases to the next company and to consumers. And consumers have been playing along eagerly, having switched from being fairly astute buyers and price shoppers to paying whatever. This is the inflationary mindset that has taken over.

We have seen that a ceiling is now getting hit in used cars where prices spiked by 40% and buyers’ resistance has set in, and sales volume industry-wide is now declining despite plenty of supply. But in other products and services, buyers’ resistance has not been met yet. And even if the price of one product hits resistance, the price of another product breaks loose.

Inflation Nightmare Keeps Getting Worse: Producer Prices Break Out. Inflationary Mindset Rules | Wolf Street

There is an end to ‘crazy money’.