US PPI Reaches 5.4% in August, Boosting Expectations of a 25 bps Fed Rate Hike

23:00 - 10.09.2026


September 10, Fineko/abc.az. US Producer Price Index (PPI) inflation rose to 5.4% year-on-year in August, driving market expectations for a 25 basis point rate increase by the Federal Reserve at its upcoming meeting. According to CME Group FedWatch pricing, the probability of a September rate hike has escalated to nearly 70%.

The Fed has held its policy rate unchanged in the 3.50%-3.75% range since December, while inflation has remained persistently above the 2% target for over five years. Analysts at Capital Economics noted that even if the central bank pauses at its September 15–16 meeting, further monetary tightening before year-end remains highly likely.

The upcoming Core CPI report will serve as the primary catalyst for the central bank's final decision.