Trump has said there is "no inflation"

Wholesale prices unexpectedly fell in August as producer inflation came in far below estimates, teeing up the Federal Reserve to slash interest rates next week.

The Producer Price Index, which measures final demand goods and services prices, declined 0.1% in August – significantly below estimates of a 0.3% rise and a heated 0.7% pace in July, the Bureau of Labor Statistics said Wednesday.

Over the past 12 months, the PPI rose 2.6% in August.

Excluding volatile food and energy prices, core PPI also fell 0.1% in August. The core figure is up 2.8% on a yearly basis.

President Trump was quick to slam Fed Chairman Jerome Powell after the tame inflation report, as the Fed has held off on cutting rates since December 2024, citing uncertainty around tariffs.

“Just out: No Inflation!!! ‘Too Late’ must lower the RATE, BIG, right now. Powell is a total disaster, who doesn’t have a clue!!!” Trump wrote in a post on Truth Social.

Traders are now placing 100% odds on an interest rate cut at the Fed’s meeting on Sept. 17, according to CME FedWatch, which tracks 30-Day Fed Funds futures prices. 

The likelihood of a larger, half-point cut even jumped to 10% on Wednesday. Odds of a quarter-point cut reached 90%.

“Wednesday’s PPI is exactly the kind of report that the Federal Reserve was hoping for. Tame inflation data gives the Fed the all clear to cut rates later this month,” Robert Ruggirello, chief investment officer at Brave Eagle Wealth Management, told The Post.

“While there is volatility in inflation data, we believe that inflation is yesterday’s story as the Fed is more focused on the softening labor market.”