July PPI Jump Complicates Fed’s Path to September Rate Cut

The producer price index rose 0.9% in July, marking the largest single-month increase since June 2022 and pushing headline PPI up 3.3% year-over-year. Federal-funds futures continue to price a 25 basis-point rate cut for September at about 92.6% while erasing expectations for a half-point move. Analysts warn that tariffs are inflating producer costs and may eventually be passed on to consumers, risking renewed consumer-price pressures. Deere & Company beat third-quarter earnings estimates but narrowed its full-year net-income guidance to $5 billion, citing tariff headwinds and weak agricultural demand. With no FOMC meeting this month, investors are positioned cautiously as they await Fed Chair Jerome Powell’s remarks at Jackson Hole and fresh CPI, PCE, and labor data.

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