Peter Schiff, chief economist at Euro Pacific Asset Management, posted on X on Friday, November 13, 2026, that October's producer price index (PPI) data indicates a need for more stringent monetary policy. Schiff stated, "October headline and core producer prices rose 0.3%, with YoY prices rising 6.5% and 5%, respectively. Since the PPI leads the CPI, these numbers are inconsistent with the CPI heading down to 2% and show that far more aggressive rate hikes are needed than the Fed has indicated."
The reported PPI figures arrive amidst ongoing discussions about inflationary pressures. Recent Gokhshtein Media coverage highlighted that the Kobeissi Letter reported broadening US inflationary pressures. Another report from Liz Ann Sonders noted October PPI inflation at +6.5% year-over-year for headline and +5.0% for core, aligning with estimates. Mohamed El-Erian also observed that October monthly PPI came in line with consensus for core and better than expected for headline, bringing annual measures to 5.0% (core) and 6.5% (headline).
Schiff's view implies that the current pace of Federal Reserve policy is insufficient to curb inflation effectively. He suggests that if the PPI trend continues to lead the Consumer Price Index (CPI), the Fed will be forced to increase interest rates more substantially than currently projected to reach its 2% inflation target. This perspective contrasts with recent market expectations, which Mohamed El-Erian noted are pricing in about three-and-a-half rate hikes over the next 12 months.
