'An early warning shot.' Wholesale prices surge as companies eat tariff costs, for now

Inflation & Economic Indicators - Producer Price Index (PPI) surged nearly 1% last month, the biggest monthly jump in over 3 years, signaling potential future inflation spikes [1] - Consumer Price Index (CPI) usually lags PPI, suggesting a high chance of inflation increase in the coming months as producers pass increased wholesale prices to consumers [2][3] - Markets barely reacted to the PPI news because they are future discounting mechanisms estimating various outcomes, and the economy inherited by the president is robust with strong corporate balance sheets and profits [6][7] - Tariffs could cost American manufacturers like John Deere $600 million in 2025, potentially impacting profits or consumer prices [8] Market Dynamics & Government Intervention - S&P 500 companies derive 50% of their revenues from around the world, mitigating the impact of US tariffs, and tax cuts and deregulations are driving the market [10] - The Trump administration's policies create a "Trump collar" effect, where market performance influences the implementation of economic ideas and interventions [11] - The Trump White House is considering a stake in Intel, reminiscent of "capitalism with Trump characteristics" or state capitalism, where the government demands a share of revenue [12][13] - The proposed government stake in companies like Nvidia and Intel is viewed as a 15% tax on revenue, raising questions about legality and potential litigation [17][18] Cryptocurrency & Banking - Banks are increasingly interested in cryptocurrency due to rule changes under the Trump administration that make it more profitable [21][22][23] - BlackRock's Bitcoin ETF has $80 billion in it, generating fees for the company, indicating the growing financial interest in crypto [23]