September 10 2025 – Wholesale prices in the US unexpectedly fell in August, adding fresh momentum to bets that the Federal Reserve will cut interest rates next week, with markets now focused on tomorrow's consumer price index for the final confirmation.
This is the bullish analysis from the CEO of one of the world's largest independent financial advisory and asset management organizations as the Bureau of Labor Statistics reported Wednesday that the producer price index (PPI) fell 0.1% in August, compared to expectations for a 0.3% rise.
Core PPI, which strips out volatile food and energy components, also declined 0.1% against forecasts of a 0.3% increase.
Nigel Green, chief executive of deVere Group, comments: “This surprise decline in wholesale prices strengthens the already powerful case for the Fed to begin easing policy.
“The debate is no longer about whether the central bank cuts rates, but about the size of that first cut. Futures markets are fully pricing in a 25-basis-point reduction, with growing speculation around a larger 50-point move.”
Markets immediately reinforced that view. Treasury yields slipped further as bond traders positioned for easier policy.
The dollar weakened against major peers, while risk-sensitive currencies such as the Australian and New Zealand dollars advanced. Gold and silver remained elevated, reflecting ongoing demand for hedges in a looser monetary environment.
“This PPI release is crucial because it signals that underlying price pressures are not only moderating but, in some categories, reversing,” explains the deVere CEO.
“It reduces the risk that the Fed faces a credibility problem if it cuts rates with inflation still running hot. Today's numbers give policymakers the space they need.”
The focus now shifts to Thursday's CPI report, which will provide the most important signal ahead of the September FOMC meeting. Traders expect that even an upside surprise would alter only the size of the cut, not its inevitability.
“Tomorrow's CPI will be dissected line by line, but the bigger picture is already clear,” adds Nigel Green.
“With the labor market weakening after last week's sweeping payroll revisions, and now producer prices cooling, the Fed has the green light. Inflation is no longer the binding constraint it once was. Growth and jobs are taking precedence.”
President Donald Trump's calls for lower rates, aimed at countering the impact of sweeping tariffs and reducing borrowing costs on national debt, have added to the backdrop, though the PPI decline underscores that economic conditions themselves justify action.
Nigel Green concludes: “Today's PPI shock locks in the trajectory.
“Tomorrow's CPI may set the pace, but the destination is unchanged: the Fed is about to cut rates for the first time since 2020.
“Markets are preparing accordingly, and equities look set to push into record territory.”