🔴🇺🇸 PRODUCER INFLATION RISES STRONGLY IN THE UNITED STATES.

➡️ The year-over-year Producer Price Index (PPI) rose +3.3% vs. +2.5% expected.

➡️ The monthly PPI rose +0.9% vs. +0.2% expected.

➡️ The monthly Core PPI (excluding food and energy) rose +0.9% vs. +0.2% expected.

➡️ The year-over-year Core PPI rose +3.7% in July vs. +2.9% expected.

🔴🏦🇺🇸 The probability of a rate cut for September was little changed, still holding at 94%.

➡️ The possibility of a third rate cut in 2025 fell to 50% from 54% before the release of US producer inflation.

🔴🏦🇺🇲 Fed's Musalem (votes in 2025)

➡️ Rules out a 0.50% rate cut: data doesn't support it.

➡️ "Tariffs drive inflation in essential goods and services; the impact could last 6-9 months or more."

➡️ The labor market remains strong: weaker demand and supply of jobs, without mass layoffs.

➡️ Musalem now sees more risk in employment and less in inflation; the payroll breakeven rate should be below 50,000.

➡️ Warns that aggressively lowering rates could raise inflation expectations.