Latest / Markets with Megan: A Quick Financial Markets Update / Is PPI Report the Fed's Green Light | S2 E076 | 09-10-25

Transcript

Is PPI Report the Fed's Green Light | S2 E076 | 09-10-25 · Markets with Megan: A Quick Financial Markets Update

• 0:00
  Megan Horneman: So far, the inflation data we've received has given the Fed the green light to cut interest rates.
• 0:05
  Megan Horneman: Next week it's Wednesday, september the 10th, and this is Markets with Megan.
• 0:08
  Megan Horneman: If you like this podcast, please subscribe.
• 0:11
  Megan Horneman: Hit that alarm bell you can share with friends, family or colleagues and, as always, we're here to break down that economic data that we receive and what it's doing to the markets.
• 0:19
  Megan Horneman: What we received this morning was the August data on the producer price index.
• 0:24
  Megan Horneman: So what are producers paying for their goods?
• 0:29
  Megan Horneman: And we saw that the headline number actually declined 0.1%.
• 0:34
  Megan Horneman: The expectation was for it to increase by 0.3%.
• 0:37
  Megan Horneman: So very welcome news.
• 0:39
  Megan Horneman: On the inflation front, when you look at the details within that, the big declines were seen in not only food, but energy was the big, big culprit there.
• 0:49
  Megan Horneman: We saw a pretty big decline in energy.
• 0:52
  Megan Horneman: Where there was still some I guess you could say stubbornness was in the service side, and we know that that's what the Fed considers the sticky inflation.
• 1:01
  Megan Horneman: But overall, a lot of this data came in weaker than expected, meaning that this can open the door for the Fed to cut those interest rates next week.
• 1:10
  Megan Horneman: Now the one area that is not being talked about.
• 1:14
  Megan Horneman: That still keeps us in the back of our head concerned that we can't shut the door on inflation and say it's completely behind us is when you exclude all of those volatile items so excluding food, excluding energy and trade you saw that, on a month-over-month basis, rise 0.3%.
• 1:32
  Megan Horneman: That was the expectation for it to rise 0.3% and it is better than last month's six-tenths of a percent increase.
• 1:38
  Megan Horneman: But when you translate that into the year-over-year basis, producer prices are rising 2.8% year-over-year, slightly higher than last month's 2.7% and the highest that we've seen since March of this year.
• 1:52
  Megan Horneman: So this volatility around tariffs, so far it's showing that it's not necessarily filtering into inflation, but it's been back and forth and up and down.
• 2:00
  Megan Horneman: We're not going to take one month as a complete trend, but we are going to and forth and up and down.
• 2:03
  Megan Horneman: We're not going to take one month as a complete trend, but we are going to take this as welcome news that the Fed will be able to cut interest rates at their meeting next week.
• 2:11
  Megan Horneman: Now we'll be back tomorrow because this will be followed by that sister report on the Consumer Price Index and this will be the last inflation report that the Fed's really going to look at before they make the decision on interest rate cuts for next week.
• 2:25
  Megan Horneman: That's all we have today.
• 2:27
  Megan Horneman: If you want a further history of our podcast, you can go to marketswithmegan.
• 2:29
  Megan Horneman: fm.
• 2:30
  Megan Horneman: Thank you.