The U.S. Department of Labor has released the government’s last look on inflation ahead of Wednesday’s Federal Open Market Committee (FOMC) meeting, from which a rate hike seems imminent. Inflation continued to rise on the wholesale level in November, at least by enough to offer cover for a rate hike.

The Producer Price Index (PPI) for final demand was up 0.4% on the headline and up by 0.4% as well on the core PPI (excluding food and energy). Bloomberg and Dow Jones both had called for 0.2% on the headline PPI and a 0.2% gain on the core reading as well.

Where the inflationary numbers look hotter are in the year-over-year readings, which is actually what the Federal Reserve and economists and consumers use to measure inflation. The headline PPI was up 1.3% from a year ago in November, and the core PPI was up a hotter 1.6% from a year ago.

On top of the core rate that excludes food and energy is a newer reading that excludes food, energy and trade services. This was up 0.2% from the prior month, but November’s annualized reading from a year ago was up 1.8%.

The Bureau of Labor Statistics did offer up some data points on product detail prices:

In November, prices for iron and steel scrap jumped 11.4 percent. The indexes for beef and veal, fresh fruits and melons, pharmaceutical preparations, electric power, and cigarettes also increased. In contrast, gasoline prices fell 2.9 percent. The indexes for fresh and dry vegetables and for light motor trucks also decreased.

Wednesday’s inflation readings are only likely to act as a positive bias in giving Federal Reserve Chair Yellen and the FOMC’s voting members even more cover to hike interest rates later this afternoon.

The CME’s FedWatch Tool was last seen indicating a 97.6% chance that federal funds would be raised by 0.25% to a new target range of 0.50% to 0.75%. This remains incredibly low on a historical basis, and note that the same FedWatch Tool does not show a stronger chance of rates going to a 0.75% to 1.0% range until the June 2017 FOMC meeting.

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