Producer Prices Match Expectations in September, but Fed Debate Intensifies

The Producer Price Index (PPI) for final demand rose 0.3% in September on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported Thursday. The print matched expectations, following a 0.1% decline in August and a 0.8% increase in July. Over the past 12 months, producer prices climbed 2.7%.

Core PPI—which excludes volatile food, energy, and trade services—edged up 0.1% in September after a 0.3% gain in August. On an annual basis, the core index rose 2.9%.

The Federal Reserve remains sharply divided over the path of monetary policy as inflation proves sticky and signs of labor-market softening intensify. Upcoming data could provide crucial clarity, helping policymakers determine whether to pause their rate-cut cycle or press ahead with additional easing at the December meeting.

That uncertainty is clearly reflected in market pricing. Expectations for a quarter-point cut have swung dramatically in recent weeks. Interest-rate futures were pricing in an 83% probability of a cut, up from roughly 42% a week earlier but down from nearly 92% in late October, according to the CME FedWatch tool.

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About Joe Palmisano

Joe Palmisano is Editorial Director for Connect Money, where he brings nearly three decades experience of market insights as a financial journalist, analyst and senior portfolio manager for leading financial publications, advisory firms, and hedge funds. In his role as Editorial Director, Joe is responsible for the selection of content and creation of daily business news covering the financial markets, including Alternative Assets, Direct Investment and Financial Advisory services. Before joining Connect Money, Joe was a financial journalist for the Wall Street Journal, regularly publishing feature stories and trend pieces on the foreign exchange, global fixed income and equity markets. Joe parlayed his experience as a financial journalist into roles as a Senior Research Analyst and Portfolio Manager, writing daily and weekly market analysis and managing a FX and US equity portfolio. Joe was also a contributing writer for industry magazines and publications, including SFO Magazine and the CMT Association. Joe earned a B.S.B.A. in Finance from The American University. He holds the Chartered Market Technician (CMT) designation and is a member of the CFA Institute.

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