“…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
“…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
“Unintended Consequences is far smarter and more thought-provoking than most economics written for the general public” - Greg Mankiw, Harvard University, Former Chairman of the Council of Economic Advisors
“…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
“Unintended Consequences is full of substance, it is one of the must-read books of the year, and once I finish it I will be giving it a second read through right away.” - Tyler Cowen, Professor, George Mason University
“…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
“…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
“…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
“…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
“…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
“…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
“A full-throated defense of economic dynamism.” - The Wall Street Journal
AI Summary.US consumer prices rose 3.7% year over year in September, up from 3.4% in August and above economists' 3.6% forecast, with core prices excluding food and energy up 2.6%. Prices rose faster than average hourly earnings, which increased 3%, meaning many Americans' real incomes are falling.
Konrad PutzierWall Street Journal
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Inflation accelerated in September, rising to 3.7% annualized from August’s 3.4%. Real average hourly earnings fell .7% year over year.
Is inflation accelerating faster than wages, cutting real incomes?
Core argument: U.S. consumer prices rose 3.7% in September from a year earlier, the Labor Department said, up from August’s 3.4% and above the 3.6% expected by economists surveyed by The Wall Street Journal.
Consumer prices were up 3.7% in September from a year earlier, the Labor Department said Wednesday, hotter than August’s gain of 3.4%. That was above the 3.6% rise expected by economists surveyed by The Wall Street Journal. Core prices excluding food and energy rose 2.6%, above forecasts for a 2.5% increase. Month over month, core prices rose by 0.3%, surprising economists who had expected a 0.2% increase. High prices have been a political flashpoint for Americans, who have grown fed up with five years of inflation. Prices rose much faster in September than average hourly earnings, which increased 3% from a year earlier. That means many Americans are seeing their real incomes fall.
Takeaways by Macro Roundup® AI
U.S. consumer prices rose 3.7% in September from a year earlier, the Labor Department said, up from August’s 3.4% and above the 3.6% expected by economists surveyed by The Wall Street Journal.
Core prices excluding food and energy rose 2.6% year over year in September, above forecasts of 2.5%, and 0.3% month over month against expectations of 0.2%.
September prices rose much faster than average hourly earnings, which increased 3% from a year earlier, meaning many Americans are seeing real incomes fall.
Related Articles:
Do Voters Punish Inflation or Pay Cuts? Inflation and Real Wages in U.S. Elections— An analysis of U.S. counties estimates that where wages grew faster than prices, voters supported the incumbent party more, while counties with larger real wage losses than average shifted more toward the opposition. A one-standard-deviation larger real wage loss is associated with shifts of roughly 0.10 and 0.19 percentage points in vote share and margin.
Sticky Wage Norms and the Real Wage Cost of Unexpected Inflation— Firms set nominal wage increases by round-number rules—about 42% of increases below 6% fell within 0.01 percentage points of a whole or half number—and these rules rose only from about 2.7% to 3.5% as inflation peaked near 7%, contributing to falling real wages for job stayers.
The Cost of Money is Part of the Cost of Living: New Evidence on the Consumer Sentiment Anomaly— Variation in the University of Michigan consumer sentiment index that inflation and unemployment cannot explain is strongly correlated with growth in consumer borrowing costs, such as mortgage and car loan rates. The authors estimate that including interest payments and homeownership costs in the consumer price index would raise measured inflation from 3% to 9%.
AI Summary.Federal Reserve Bank of New York researchers estimate that about 26% of a uniform tariff passes through into non-oil consumer goods prices over twelve months, with roughly 64% of that effect coming directly from higher import prices and the rest through domestic producers' input costs and markups. Pass-through into import prices is nearly immediate, while domestic price responses build gradually.
Mary Amiti,Sebastian Heise and David WeinsteinFederal Reserve Bank of New York
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FRBNY estimates that a uniform 10% tariff raised consumer-goods prices 2.6% after 12 months: 1.7pp directly via imported final goods, and 0.9pp mainly via higher imported-input costs for domestically produced goods, with the latter effect building over 9–12 months.
How much of a tariff reaches consumer prices within a year?
Core argument: Amiti, Heise, and Weinstein estimate that a uniform tariff passes through to non-oil consumer goods prices at roughly 26 percent over twelve months, with a 10 percent tariff raising prices 2.6 percentage points, 1.7 points of it via the direct import channel.
Tariff pass-through into U.S. import prices is nearly complete. Instrumenting realized duty rates with statutory tariffs to account for endogenous sourcing and exemptions, tariff pass-through into consumer-goods import prices is about 90.5%; a 10% increase in the duty rate raises import prices about 9.1%. At twelve months, a uniform 10% tariff raises consumer-goods prices 2.639%: 1.694pp through the direct channel, 0.770pp through marginal costs, and 0.175pp through strategic complementarity. Import-price pass-through is essentially immediate, while domestic prices adjust gradually; the contribution of the two indirect channels roughly doubles between six and twelve months, with much of the overall adjustment occurring within nine to twelve months. For the actual 2025–26 tariffs, the direct channel accounts for about 70% of the estimated effect; the marginal-cost channel accounts for about 22%, with strategic complementarity accounting for the remainder. Because the regressions include date fixed effects, the tariff contribution is identified relative to less-exposed goods and should be read as illustrative rather than as the absolute contribution to aggregate goods CPI.
Takeaways by Macro Roundup® AI
Amiti, Heise, and Weinstein estimate that a uniform tariff passes through to non-oil consumer goods prices at roughly 26 percent over twelve months, with a 10 percent tariff raising prices 2.6 percentage points, 1.7 points of it via the direct import channel.
The two indirect channels — marginal costs from imported inputs (0.77 percentage points) and strategic complementarity in domestic markups (0.17 points) — account for 36 percent of the total effect and roughly double between six and twelve months after tariff implementation.
Applied to the actual 2025–26 tariff schedule, the authors estimate the cumulative tariff contribution to goods CPI reached about 2.9 percentage points by February 2026, with import-price pass-through near 90 percent and retail pass-through of 0.56.
Related Articles:
The State of U.S. Tariffs July 24, 2026— The average statutory US tariff rate stands at 11.1% and, under current law including scheduled increases, is projected to reach 11.8% by year-end. The authors estimate current-law tariffs will raise consumer prices by about 0.7% and generate roughly $1.9tn over ten years, with revenue somewhat lower after accounting for tariffs' negative effect on economic output.
Who Is Paying for the 2025 U.S. Tariffs?— The authors estimate that 94% of U.S. tariff costs were borne domestically over the first eight months of 2025, with a 10% tariff associated with only a 0.6 percentage point decline in foreign export prices. Pass-through into U.S. import prices later declined to 86%, shifting more of the burden to foreign exporters.
Demand-Driven Inflation— Demand and supply curves estimated from pre-pandemic data imply relatively flat demand curves in the US and euro area, so adverse supply shifts would produce large output losses but comparatively little inflation. The authors argue explaining the observed combination of high inflation and output requires outward demand shifts, including accommodative monetary policy alongside fiscal expansion.
AI Summary.Demand and supply curves estimated from pre-pandemic data imply relatively flat demand curves in the US and euro area, so adverse supply shifts would produce large output losses but comparatively little inflation. The authors argue explaining the observed combination of high inflation and output requires outward demand shifts, including accommodative monetary policy alongside fiscal expansion.
Domenico Giannone and Giorgio PrimiceriBookings Papers on Economic Activity
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Giannone and Primiceri revisit the relative role of supply vs. demand shocks in generating the post-Covid inflation. Because aggregate demand curves estimated from pre-pandemic data are flat, supply shocks alone would not have generated large inflation in the absence of added demand stimulus.
Did outward demand shifts, not supply shocks alone, drive recent inflation?
Core argument: Demand curves estimated from pre-pandemic US and euro-area data are relatively flat, reflecting central banks’ strong pre-pandemic responses to inflation, so adverse supply shifts produce large output losses but comparatively little inflation.
Demand and supply curve slopes are estimated from pre-pandemic data using the essentially definitional restriction that supply shocks move prices and output in opposite directions along demand curves, while demand shocks move them together along supply curves; the plotted slopes represent Bayesian posterior medians rather than uniquely identified estimates. The estimated demand curves are relatively flat in both the US and euro area [Figure 7], reflecting the central banks’ strong pre-pandemic responses to inflation. With those slopes, adverse supply shifts cause large output losses but comparatively little inflation. [To successfully explain] the combination of inflation and output observed in 2022 therefore requires demand to shift outwards too. Strong demand, including unusually accommodative monetary policy [on top of strong fiscal expansion], cushioned the output losses while increasing inflation [Figure 7]. In 2021–22, both inflation and GDP as subsequently revised exceeded forecasts in the US and euro area. That combination is suggestive of unexpectedly strong demand, whereas an adverse supply surprise alone would raise inflation but lower output. [Figure 9].
Takeaways by Macro Roundup® AI
Demand curves estimated from pre-pandemic US and euro-area data are relatively flat, reflecting central banks’ strong pre-pandemic responses to inflation, so adverse supply shifts produce large output losses but comparatively little inflation.
Explaining the 2022 combination of inflation and output requires an outward shift in demand, with strong demand — including unusually accommodative monetary policy atop fiscal expansion — cushioning output losses while raising inflation.
In 2021–22, both inflation and GDP as subsequently revised exceeded forecasts in the US and euro area, a combination suggestive of unexpectedly strong demand, since an adverse supply surprise alone would raise inflation but lower output.
Related Articles:
Are Government Bonds Safe in Times of War and Pandemic?— Government bonds severely underperform in wartime, in absolute terms and relative to equities, housing, and economic growth, unlike in financial crises when bonds tend to outperform stocks. The U.S. and U.K. reduced war-driven debt-to-GDP ratios without explicit default, using surprise inflation and financial repression that shifted fiscal burdens onto bondholders.
Why Did Inflation Rise And Fall In 2021-24? Channels And Evidence From Expectations— Across countries, unexpectedly higher government deficits relative to earlier International Monetary Fund forecasts are associated with unexpectedly higher inflation, measured by each factor's contribution to the increase in public debt, a relationship the author finds statistically significant. This evidence is consistent with a fiscal channel for inflation.
Fiscal Influences on Inflation in OECD Countries, 2020-2022— Across 21 economies, the authors find that headline and core inflation responded positively to a measure of government spending increases scaled by pre-pandemic debt-to-GDP and average debt duration. Estimated coefficients of 0.4–0.5 suggest 40–50% of the extra spending was financed through inflation, with the rest through conventional public finance.
AI Summary.The Institute of International Finance reports global debt as a share of output rose less than 10 percentage points between 2018 and mid-2026, peaking at 337% in early 2021 before falling 27 percentage points by the end of 2023. Inflation eroded the debt burden, as it did in the UK after the Second World War.
Martin WolfFinancial Times
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Wolf notes that the global debt-to-GDP ratio rose by less than 10pp btw 2018 and June 2026: after peaking at 337% in early 2021, it fell by 27pp by the end of 2023, as inflation boosted nominal GDP and eroded the value of existing debt.
Does inflation reduce the global debt burden?
Core argument: IIF data show the global debt-to-output ratio reached a post-Covid peak of 337% in early 2021 before falling by 27 percentage points by the end of 2023, with inflation identified as the force that eroded it.
The IIF shows that between 2018 and June 2026, the rise in the ratio of global debt to output was less than 10 percentage points. The story is striking: the ratio reached a post-Covid peak of 337% in early 2021, before falling by 27 percentage points by the end of 2023. What was this magical “debt-buster”? Good old-fashioned (and supposedly “unexpected”) inflation. This is — to put it mildly — not the first time inflation has wiped out debt. It was, to take one of countless examples, an important part of the UK’s elimination of its post-second-world-war debt. For countries able to print the money in which their debt is denominated, that is often what happens.
Takeaways by Macro Roundup® AI
IIF data show the global debt-to-output ratio reached a post-Covid peak of 337% in early 2021 before falling by 27 percentage points by the end of 2023, with inflation identified as the force that eroded it.
Between 2018 and June 2026, the IIF shows the ratio of global debt to output rose by less than 10 percentage points.
Inflation has wiped out debt before, forming an important part of the UK’s elimination of its post-second-world-war debt, and often does so for countries able to print the currency in which their debt is denominated.
Related Articles:
Are Government Bonds Safe in Times of War and Pandemic?— Government bonds severely underperform in wartime, in absolute terms and relative to equities, housing, and economic growth, unlike in financial crises when bonds tend to outperform stocks. The U.S. and U.K. reduced war-driven debt-to-GDP ratios without explicit default, using surprise inflation and financial repression that shifted fiscal burdens onto bondholders.
The Coming Great Repression?— Across countries and over time, higher public debt burdens are associated with lower relative returns on government bonds, the opposite of standard risk-premium predictions. The authors estimate financial repression—making banks captive bond buyers and loading them with low-return reserves—contributed 90.7 percentage points of GDP to Britain's postwar debt reduction, versus 20.3 from surprise inflation.
Global Debt Report 2026— Gross central government borrowing across OECD countries rose 7% to a record $17tn, about 23% of GDP, and is projected to reach roughly $18tn, or 24% of GDP. The United States and Japan account for close to 80% of the area's refinancing requirements, with the US share rising from 57% to 70%.
AI Summary.Federal Reserve officials' assessed risks to their employment and price stability mandates had tended to move together rather than inversely, suggesting common forces were driving both. That pattern has now shifted, with officials more optimistic on growth and employment and less concerned about downside risks than before the pandemic.
Matt KleinThe Overshoot
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About half of Fed officials now forecast that at the end of 2028 short rates will be “at least as high as they are now.” The underlying reason, Klein proposes, is not supply shocks but a persistent shift in the perceived balance of risks between inflation and unemployment.
Have central bankers' employment and inflation risk assessments stopped moving together?
Core argument: From mid-2022 until now, Fed officials’ assessments of risks to the employment mandate and the price stability mandate tended to move together, consistent with judging that the forces driving unwelcome inflation also threatened the jobs outlook.
From mid-2022 until now, Fed officials seem to have judged that all of the forces responsible for unwelcome inflation also threatened the outlook for jobs. That would explain why their assessment of the risks to the employment mandate and to the price stability mandate tended to move together [see “Aligned Mandate” in gallery]. If “normal” factors such as consumers’ access to credit or businesses’ appetite to invest were driving things, the perceived risks to the inflation and employment mandates would be uncorrelated, or even move inversely to each other. That shift has finally happened. In fact, Fed officials are now more bullish on growth and employment—and less concerned about downside risks—than they have been since before the pandemic. The latest data on private sector balance sheets, borrowing, and asset purchases can help explain why.
Takeaways by Macro Roundup® AI
From mid-2022 until now, Fed officials’ assessments of risks to the employment mandate and the price stability mandate tended to move together, consistent with judging that the forces driving unwelcome inflation also threatened the jobs outlook.
Fed officials are now more bullish on growth and employment, and less concerned about downside risks, than they have been since before the pandemic.
If normal factors such as consumers’ access to credit or businesses’ appetite to invest were driving the economy, perceived risks to the inflation and employment mandates would be uncorrelated or move inversely, a shift that has now happened.
Related Articles:
Just Waiting for Disinflation is Not Enough— About 52% of consumer price index components are rising at least 3% year-over-year, down from 73% at the peak but above the 32% average from 2000 to 2020, and such breadth measures track actual inflation closely. Weighting components by spending shares makes the current episode resemble milder past inflation accelerations rather than the largest ones.
The Diesel Shock Is a Core Inflation Shock— The US Gulf Coast diesel crack spread cleared $100 per barrel for the first time on record, against a normal range of $15 to $30. Because diesel is an intermediate input embedded in the delivered cost of nearly every physical good, the author argues the increase migrates with a lag into core goods and services inflation.
Weeks Before the Midterms, Almost Everything Is Getting More Expensive— Wage gains have trailed inflation for five months, and consumer prices are 27% higher than at the start of 2021. The "misery index," the sum of the inflation and unemployment rates, stands at 7.5, up from 6.7 a year earlier.
AI Summary.The rise in US bond yields, which has pushed 30-year fixed mortgage rates back above 7%, reflects higher real yields rather than higher inflation expectations, with market-based inflation breakevens barely changed over the past five years. The negative real yields that made financing exceptionally easy have reversed.
John AuthersBloomberg
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Authers presents real evidence that the increase in bond yields is not an alarming indication of elevated expected inflation. “Breakevens barely budged over the last five years,” he notes.
Are rising bond yields driven by real yields rather than inflation expectations?
Core argument: US 30-year fixed mortgage rates are back above 7% as bond yields return to 2007 levels, a rise the evidence attributes more to a “good” pickup in growth than to other widely cited causes.
The rise in bond yields looks alarming and has had a horrible effect on US mortgages, with 30-year fixed rates back above 7%. But the evidence is that the overall rise in yields is more a response to a “good” rise in growth, rather than to other widely cited potential causes. Consumers’ inflation concerns have risen since the Iran war drove up oil prices nearly seven months ago, but longer-term market-based inflation expectations have barely budged. Yields can be broken into real and inflation-driven components using the gap between fixed income and inflation-protected bonds (TIPS). Inflation breakevens barely budged over the last five years; real yields are now higher and account for all of the rise of the last five years. To illustrate that differently, negative real yields drove the exceptionally easy financing conditions of 2021. That’s now totally reversed.
Takeaways by Macro Roundup® AI
US 30-year fixed mortgage rates are back above 7% as bond yields return to 2007 levels, a rise the evidence attributes more to a “good” pickup in growth than to other widely cited causes.
Inflation breakevens, the gap between fixed income and inflation-protected bond yields, have barely budged over the last five years, so higher real yields account for all of the rise in bond yields over that period.
Consumers’ inflation concerns have risen since the Iran war drove up oil prices nearly seven months ago, while longer-term market-based inflation expectations have barely moved.
Related Articles:
Don’t Draw The Wrong Conclusion From Treasury Yields— Ten-year real yields equal the average expected overnight rate over the next decade plus a term premium, and fiscal credibility or debt sustainability concerns would show up as a higher term premium. With the term premium and inflation expectations contained, the increase in bond yields reflects higher expected long-term overnight rates.
How Might Fiscal Policy Respond to the Rise of Artificial Intelligence?— The Congressional Budget Office estimates that a permanent 0.5 percentage point increase in annual productivity growth would lower publicly held federal debt after 30 years by 39% of GDP, offsetting roughly half the projected rise from 101% of GDP to 175%. Higher revenue and slower spending growth outweigh higher interest costs.
America’s Risky Debt: What Markets See That Policymakers Don’t— Two market-based measures suggest the safety premium investors pay to hold US Treasuries has compressed toward zero and at times reversed: the spread between top-rated corporate bonds and Treasuries after stripping out default risk, and the gap between currency-hedged foreign G10 government yields and Treasury yields at the same maturity, where longer-maturity comparisons now favor foreign bonds.
AI Summary.Yields on the longest-dated US government bonds reached their highest level in more than two decades, while the average yield on government debt worldwide stands just below 4%, the highest since 2007. A gauge of US bond market volatility also climbed, making investors more hesitant to buy despite the more attractive yields.
Alice Atkins, Ruth Carson and Elizabeth StantonBloomberg
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The US 30-year Treasury yield jumped as much as 7bp to 5.47%, its highest level since 2004. The US 10-year Treasury yield rose to 5.18%.
Are rising bond yields failing to attract hesitant investors?
Core argument: The US 30-year Treasury yield rose to its highest level since 2004 as the selloff in the longest-dated government bonds deepened.
Yields on the US’s longest-dated bonds climbed to the highest level in more than two decades. The average yield on government debt worldwide now stands within a whisker of 4%, the highest since 2007, Bloomberg’s Global Aggregate Treasuries index shows. Rising volatility is adding to the gloom, making investors more hesitant to step in even as higher yields make bonds more attractive. The ICE BofA MOVE Index, which measures US bond market swings, climbed Wednesday to the highest level since March. “Most fixed income will like higher yields, but want them to be stable there,” said Hans Mikkelsen, strategist at TD Securities. Investors are “afraid of catching a falling knife,” he said.
Takeaways by Macro Roundup® AI
The US 30-year Treasury yield rose to its highest level since 2004 as the selloff in the longest-dated government bonds deepened.
The average yield on government debt worldwide stands just below 4%, the highest since 2007, according to Bloomberg’s Global Aggregate Treasuries index.
The ICE BofA MOVE Index of US bond market swings climbed to its highest level since March, with TD Securities strategist Hans Mikkelsen saying investors are “afraid of catching a falling knife.”.
Related Articles:
Interest Rates and Stock Prices: An Old Debate Resurfaces!— An estimate of the intrinsic 10-year US Treasury rate, built from actual inflation and real economic growth, far exceeded the actual 10-year Treasury rate after inflation surged, and that gap has since narrowed to roughly 4.75% actual versus 5.41% intrinsic.
High Yields Are Here to Stay— The authors estimate the natural inflation-adjusted rate on 10-year US Treasuries fell from about 5% in the early 1980s to roughly 1.6% in 2010-2015 and is now rising, reaching almost 2.6%. That implies a 10-year Treasury yield consistent with stable inflation of about 4.7%.
Soaring Bond Yields, Gaping Deficits and Towering Debts: What Could Go Wrong?— An analysis of 22 rich countries estimates that if each refinanced its entire debt at current five-year bond yields, Britain would need the largest primary surplus to stabilize its debt-to-GDP ratio, about 1.5%, followed by Italy at 1.4%, France at 1.2% and America at 1%.
AI Summary.The Federal Reserve described its rate increase as having "removed a dose of accommodation" and as a start to showing it is serious, implying the policy rate remains accommodative and further increases are coming. Market-implied expectations have shifted to price in three additional hikes before the tightening cycle ends.
John AuthersBloomberg
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Authers argues a hiking cycle is underway, citing the unanimous decision to hike, the “dot plot” and Warsh’s comments framing the hike as “the removal of some accommodation,” implying the FOMC doesn’t view policy as restrictive.
Is the Fed signaling more rate increases ahead?
Core argument: Markets, as gauged by Bloomberg World Interest Rate Probabilities, have braced for three more Fed hikes, against an implied peak below 4% when Warsh took office in May.
The key was what Warsh didn’t say, rather than what he did. There was no suggestion that this was a one-off. Instead, he said the FOMC has “removed a dose of accommodation” — not all of it, implying the rate was still accommodative and that there would be more doses in the prescription. He added that the hike “starts to show we’re serious about this.” If that was only a start to the seriousness, the direct implication is to brace for more. As a result, the market priced in a lot of tightening. Implicit fed funds rates, as gauged by the Bloomberg World Interest Rate Probabilities, were projected to peak below 4% when Warsh took office in May — at a point when the market had already had time to adjust to the energy shock from the Iran war. Expectations crept up a bit by the time he spoke at Jackson Hole; and since then the market has braced for three more hikes before the Fed is done.
Takeaways by Macro Roundup® AI
Markets, as gauged by Bloomberg World Interest Rate Probabilities, have braced for three more Fed hikes, against an implied peak below 4% when Warsh took office in May.
Warsh said the FOMC has "removed a dose of accommodation" rather than all of it, implying the policy rate remains accommodative and that further doses are in the prescription.
Related Articles:
Just Waiting for Disinflation is Not Enough— About 52% of consumer price index components are rising at least 3% year-over-year, down from 73% at the peak but above the 32% average from 2000 to 2020, and such breadth measures track actual inflation closely. Weighting components by spending shares makes the current episode resemble milder past inflation accelerations rather than the largest ones.
Home Alone: Inflation And The New Fed Chair— Current readings on labor market tightness, manufacturing price pressures, supply chain tightness and the output gap resemble conditions that have historically preceded Federal Reserve rate increases rather than cuts, and futures markets are pricing in hikes. Averaging several monetary policy rules implies a policy rate of 4.00%–4.85% versus the current 3.50%–3.75%.
US Diesel Hits Record $6 A Gallon On Iran Supply Shock— US diesel pump prices reached a record $6.06 a gallon, above the prior high of $5.82, according to motorist group AAA. Diesel's role in the transport supply chain is feeding into rising producer prices, and grain farmers report that higher fuel and fertiliser costs are eating into profits.
