US August PPI printed 2.4% YoY versus 5.3% expected, while core PPI rose 0.2%
MoM versus 0.3% expected, a mixed signal as Fed officials debate next week’s
move. After the report, markets fully priced an October Fed rate hike. The PPI
came a day before the latest CPI, which is expected to show relatively tame core
inflation. Some Fed officials say the Sept. 15-16 decision could hinge on this
week’s data. Fed chair KEVIN WARSH said last month the Fed ‘has more work to do’
if policymakers are not confident underlying inflation is improving. Ongoing
US-Iran hostilities have pushed oil higher, complicating the outlook.
