Mixed Producer Price Report Throws Fed Rate Hike into Question

The Federal Reserve's upcoming policy meeting has become even more uncertain after the release of the US producer prices data for August.

The Producer Price Index (PPI) rose by 0.4% month-over-month and 5.4% year-over-year, but the core reading was softer than expected at just 0.2% on the month and 4.6% annually.

The headline strength came from energy prices, which jumped 1.1% due to a 24.1% surge in diesel fuel costs. Services prices increased by only 0.1% in August.

This mixed report will give the Federal Reserve's rate-setters something to consider before their September 15-16 meeting, where they may decide on whether to raise interest rates further or hold off.