Overview
- Thursday's producer price index showed a 0.4% monthly gain and a 5.4% annual rate with energy the main driver.
- The consumer price index is due Friday and consensus forecasts call for a 0.4% monthly rise with core CPI cooling to about 2.3%–2.4% year‑over‑year.
- Governor Christopher Waller said a hotter August print could justify a 25‑basis‑point increase, and futures traders now price roughly a 62% chance of a September hike while most economists still expect no more rate rises this year.
- Recent disinflation has been led by falling goods prices while services inflation, especially shelter and rent, remains sticky and risks from higher oil prices and new tariffs could push inflation back up.
- A hotter CPI would raise the odds of faster tightening, which would push up short‑term borrowing costs for households and businesses and could lift Treasury yields and the dollar in markets.