US Labor Department data showed wholesale inflation accelerated in August: PPI
rose 0.4% MoM (vs 0.1% in July), in line with economists, and was up 5.4% YoY.
Key PPI components — including medical services and airfares — feed into CPI and
therefore the Fed’s preferred PCE gauge, so markets are parsing Thursday’s PPI
to update Aug PCE estimates ahead of next week’s Fed decision. Traders should
get a clear read on the PPI subcomponents by Thursday morning, but PCE
Projections will remain materially uncertain until Friday’s CPI is published.
