Wholesale Prices Are Running Hot Again

The number that dropped Thursday morning was not close. Not ambiguous. Wholesale inflation rose 1.1% in May, month-over-month, against a consensus that had penciled in 0.7%. Year-over-year the Producer Price Index is now running at 6.5% — the fastest it has moved since November 2022. And here is the part that does not get enough attention: this is the third consecutive month above trend. April was revised to 1.1%. March was 0.7%. You can dismiss one month. Three in a row is something else.

Goods did the damage. Final demand goods prices jumped 2.8% in May alone, the largest single-month swing since the BLS launched this data series back in December 2009. Gasoline led — up 23.4% on the month — but the list underneath it was long. Diesel. Jet fuel. Industrial chemicals. Plastic resins. Services cooled to a 0.3% gain, which sounds reassuring until you realize that goods inflation is the kind the Fed cannot talk its way around. It shows up in margins. It shows up in costs. It eventually shows up in prices people actually pay.

Core wholesale prices — strip out food, energy, and trade services — rose 0.8% on the month. That is the biggest core move since March 2022. The year-over-year core read: 5.1%.

Not a Fed-friendly number.

What’s interesting is where the inflation actually lives right now. The PPI does not flow directly into consumer prices, but certain components do feed the PCE index, which is the inflation gauge the Fed actually targets. Health care services. Portfolio management. Those lines go straight from PPI into the Fed’s preferred math. With May CPI already at 4.2% year-over-year and the PPI printing 6.5%, the conversation on Wall Street has quietly shifted. Rate cuts are not the topic anymore. The question some economists are starting to ask out loud is whether the next move is a hike.

Slight tangent, but it matters: stage 1 intermediate demand prices — the stuff that feeds into production before it ever reaches final consumers — rose 3.2% in May alone. The 12-month read on that series is up 12.3%. That inflation is still in the pipeline. It has not hit store shelves yet. The Fed knows this, which is exactly why next week’s meeting feels heavier than the usual non-event.

Gold picked up on all of it fast.

Gold futures climbed 2.7% on the PPI release. That kind of single-session move on an inflation data point reflects something more than a trade — it reflects a crowded room of investors looking for something that holds its value when the policy path stops being predictable. And when gold moves like that, Newmont Corporation tends to follow. NEM gained 5.2% on June 11, the same day the report landed, bringing shares to roughly $97.59.

For context on why the stock moved so hard on a single data point: NEM had dropped roughly 18.9% over the prior month. Gold pulled back sharply from its January 2026 all-time high above $5,400 per ounce, settled into a tighter range, and compressed NEM’s share price with it. The company’s fundamentals did not change. The commodity did. So when gold snaps back, NEM snaps back harder — that leverage cuts both ways, and investors who have been watching the stock knew that.

What Newmont actually is, for anyone newer to the name: the world’s largest gold producer. Operations in the U.S., Australia, Ghana, Canada, Peru, and several other jurisdictions. Byproduct production in copper, silver, zinc, and lead. In Q1 2026 the company posted EPS of $2.90 against estimates in the $2.07 to $2.24 range — a 33% beat. Revenue came in at $7.31 billion. Free cash flow hit a record $3.1 billion for the quarter. Adjusted EBITDA was $5.2 billion. These are not small numbers for a company sitting near $97.

• Q1 2026 EPS: $2.90 vs. est. $2.07–$2.24
• Q1 revenue: $7.31B (beat by ~12%)
• Record quarterly free cash flow: $3.1B
• Adjusted EBITDA: $5.2B
• Gold production Q1: 1.3M ounces
• Full-year 2026 production guidance: 5.3M ounces
• 2027 production target: 6.0M ounces
• All-in sustaining costs (AISC): ~$1,680/oz for 2026
• Share buyback authorization: $6B, no expiration
• Dividend: $0.26/share (Q1 2026)
• Analyst average price target: $141.74 — 18 of 19 analysts at Buy

Here is where the honest tension sits. Management has already said 2026 is a planned production trough — output is expected to fall roughly 10% before the 2027 ramp begins. Rising royalties, diesel costs, taxes, and labor are all pushing AISC higher. Insiders sold more than $5.5 million in shares over the prior 90 days with zero reported buying. I am not going to wave that away. Insider selling does not always mean what people think it means, but zero buys during a 19% drawdown is worth keeping in the back of your mind.

At the same time, generating $3.1 billion in free cash flow during a so-called trough quarter, while gold was still well off its highs, says something real about the underlying business. At $4,300-plus gold with AISC near $1,680, the margin spread is wide. The company is not struggling to fund itself. The gap between $97 and analyst targets near $141 is wide enough to be interesting even if you discount the most optimistic scenarios.

What I’m actually watching from here: the Fed language next week matters more than the decision itself. A hold with hawkish language could pressure gold. A softer tone or any signal of hesitation could push gold higher and NEM with it. Then July 29 is the Q2 earnings date — that is where the cost story either stabilizes or gets messier.

6.5% wholesale inflation three months running. The pipeline still full. The Fed in a corner. Those facts do not resolve cleanly in one meeting.