Wholesale inflation stirred up by Iran war and high oil prices. What does it mean for the Fed? — SkimNews
Get the Finance newsletter
Daily finance — markets, central banks, M&A, the prints that move money. Free.
- Producer-price index rose 0.4% in August, driven by higher gasoline prices, according to government data released Thursday
- Wholesale prices had been basically unchanged in the prior two months after a brief lull in the U.S.-Iran conflict brought cheaper oil
- Two inflation reports this week — PPI and the still-pending CPI — will determine whether the Federal Reserve raises interest rates at its next meeting
- The August surge reverses the recent flat trend and ties the Iran war's energy shock directly into the Fed's rate-setting calculus
Why it matters: Gasoline costs single-handedly drove wholesale prices higher in August, undoing the reprieve from the Iran conflict's two-month lull. With the CPI report still ahead and the Fed's next rate decision days away, the remaining data point will tell policymakers whether the 0.4% PPI jump is a one-month spike or a sustained inflationary turn tied to ongoing war-driven energy costs.
Ask SkimNews
