Next Week Outlook: Will the US August PPI and CPI Data Bring a Rate Cut Closer to Reality?

BlockBeats News, September 6th. This week, the financial markets experienced ups and downs as the surprise drop in US non-farm payroll data impacted the growing expectation of a Fed rate cut. Despite the market's expectation of further rate cuts by the Fed, the US dollar surprisingly remained strong, and did not experience a significant drop even after the disappointing non-farm payroll data was released.

Several Fed observers have indicated that these non-farm payroll numbers have sealed the deal for a rate cut this month. Investors share a similar view, pushing the probability of a rate cut at this month's meeting to 99%.

Monday, 23:00: US August New York Fed 1-year inflation expectation;

Tuesday, 22:00: US 2025 Non-Farm Employment Benchmark Revision Initial Value;

Wednesday, 20:30: US August PPI Data;

Wednesday, 22:00: US July Wholesale Sales Month-to-Month Rate;

Thursday, 20:30: US August CPI Data, US Initial Jobless Claims up to September 6th;

Friday, 22:00: US September 1-year Inflation Rate Expectation Initial Value, September University of Michigan Consumer Sentiment Index Initial Value.

If the August PPI shows another unexpected increase, investors may scale back some of their more dovish rate cut expectations for the Fed. However, currently, the impact of tariffs on commodity prices seems to be modest. A potentially bigger concern for the Fed at the moment is the recent uptick in service sector inflation. According to the Cleveland Fed's real-time forecasting model, overall CPI year-over-year rate for August is expected to tick up by 0.1 percentage point to 2.8%, while the core CPI year-over-year rate is likely to remain unchanged at 3.1%.