U.S. August PPI First Take

In August, the U.S. PPI unexpectedly turned negative month-on-month for the first time in four months, further supporting the case for the Federal Reserve to cut interest rates. The report showed that despite the increase in corporate costs due to Trump's tariffs, businesses did not significantly raise prices last month. The extent to which companies pass on tariff costs to consumers will be key to the direction of interest rates this year. Although Federal Reserve officials generally expect import tariffs to drive up inflation for the remainder of 2025, they have not yet determined whether this is a one-time adjustment or a more lasting impact