August PPI Rise Aligns with Forecasts Ahead of CPI

U.S. producer prices rose 0.4% in August, in line with economists’ expectations, with the core PPI up 0.2% as food and energy were excluded. Year-over-year PPI climbed 5.4% and core PPI 4.6%. The data precede Friday’s CPI report, which analysts expect to show a monthly uptick but again a similar year-over-year pace, keeping scrutiny on inflation. Markets are pricing roughly a 64% chance of a Fed rate hike in September and about 90% by December, aided by hawkish signals from Fed officials.