world-economy

Energy Surge Pushes Inflation Fears Higher Across Markets

Traders are pricing in sharply elevated odds that U.S. inflation will breach 4.5% this year, with two-in-three probability. Nearly 40% of market participants see inflation exceeding 5% by year-end. U.S. producer prices jumped in April at their fastest rate since 2022, driven primarily by elevated energy expenses. The core wholesale inflation measure climbed 5.2% year-over-year, marking the largest increase in more than three years. Globally, India's factory-gate inflation reached a three-and-a-half-year high as manufacturers face mounting input costs from energy prices. The persistent inflationary backdrop is dampening expectations for Federal Reserve rate cuts this year. Crude oil futures are expected to climb above $125 per barrel as regional tensions sustain elevated energy prices, further pressuring logistics costs.