TREE NEWS reports: US August PPI came in at 5.4% year-on-year, above the 5.3% consensus, while core PPI rose 0.2% month-on-month against an expected 0.3%, sending mixed signals as Fed officials debate next week’s rate decision. After the release, markets fully priced in a Fed hike in October. The report lands a day before the latest CPI data, with some officials suggesting the September 15-16 meeting’s decision may hinge on this week’s figures.
US August PPI Rises 5.4% YoY, Market Fully Prices an October Fed Hike
The split between a hotter headline and a softer core reading is the real story here: it gives both hawks and doves on the Fed something to point to, which is why the market's move to fully price an October hike looks more like a positioning adjustment than a clean signal. The September meeting's outcome now effectively rides on the CPI print landing a day later, so the near-term path for risk assets, including crypto and tokenized real-world assets, hinges on a single data release rather than on any change in fundamentals. Whether the October hike stays fully priced after that CPI number is the open question.
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