Weekly Economic Report 9.12.25

It was an interesting week for the Federal Reserve – as they are widely expected to lower the overnight rates next Wednesday. As we have warned, low year ago comparisons meant that the CPI’s full year change rose from 2.7% in July to 2.9% in August – and may break 3% next month. The core CPI already topped 3% -- at 3.1% for the year ended August. Meanwhile, the PPI fell -0.1%, after its torrid 0.7% blitz last month. The annual reading fell from 3.1% to 2.6% -- still ahead of the 2.4% in June. However, the core final demand annual rate climbed from 2.7% to 2.8%. When the PCE deflators come out later this month, they too should show sharp upward movement in the annual numbers – and we would expect them to mirror the CPI, with the headline rising 0.4% and the core 0.3%. Investors basically shrugged at the data, assuming the Federal Reserve would ease by twenty-five next week anyway.

EU09-12-2025.pdf

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