Producer Prices Match Expectations in September, but Fed Debate Intensifies
The Producer Price Index (PPI) for final demand rose by 0.3% in September on a seasonally adjusted basis, according to a report released Thursday by the U.S. Bureau of Labor Statistics. The figure met economist expectations, following a 0.1% decline in August and a 0.8% rise in July. Over the past 12 months, producer prices have increased by 2.7%.
Core PPI, which excludes volatile components such as food, energy, and trade services, inched up 0.1% in September after a 0.3% gain in August. On a year-over-year basis, the core index rose 2.9%.
The Federal Reserve continues to face uncertainty and internal debate over the future trajectory of monetary policy. Inflation remains persistent, while signs point to a softening labor market. Upcoming economic data will likely play a key role in shaping whether the central bank decides to hold off on its rate-cutting plans or proceed with additional easing at its December meeting.
This uncertainty is mirrored in market movements. Expectations for a 0.25 percentage point rate cut have swung widely in recent weeks. Interest-rate futures currently reflect an 83% probability of a rate cut—up from about 42% just a week ago, but a decrease from nearly 92% in late October, according to data from the CME FedWatch tool.
