Trump presses Fed for ‘big’ rate cut after lower-than-expected PPI data

[President Trump Visits Federal Reserve]
Chip Somodevilla/Getty Images News

U.S. President Donald Trump urged the Federal Reserve to deliver a “big” interest rate cut after August’s producer price index came in below expectations.

In a Truth Social post, Trump wrote: “Just out: No Inflation!!! ‘Too Late’ — must lower the RATE, BIG, right now.”

U.S. producer prices unexpectedly declined [https://seekingalpha.com/news/4493670-august-producer-inflation-unexpectedly-declines-on-both-headline-and-core] in August, signaling softer-than-expected inflation pressures and bolstering the case for the Federal Reserve to slash interest rates at its upcoming policy meeting. Markets are already pricing in a 25 bps Fed rate cut in September, with a 10% chance of a 50 bps move.

The Producer Price Index slipped 0.1% M/M last month, compared with the +0.3% expected and the prior month's +0.7% (revised from +0.9%), according to data released by the Bureau of Labor Statistics.

Stripping out volatile food and energy costs, core PPI also edged down 0.1% on a M/M basis, vs. +0.3% consensus and +0.7% in July (revised from +0.9%).

Stock index futures were mixed after the report. S&P 500 futures (SPX [https://seekingalpha.com/symbol/SPX]) +0.5%, Nasdaq 100 futures (US100:IND [https://seekingalpha.com/symbol/US100:IND]) +0.3%, and Dow futures (INDU [https://seekingalpha.com/symbol/INDU]) -0.1%.

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