U.S. PPI Slips, Jobless Claims Tick Up; Markets Trim Fed Hike Bets

U.S. producer inflation eased in August, adding to signs that price pressures are cooling as investors gauge the Federal Reserve's next move. The Producer Price Index (PPI) fell 0.1% in August, reversing July's 0.7% gain. Initial jobless claims also rose modestly and came in slightly above expectations at 199,000. In response, market-implied odds of another Fed rate increase have edged lower. Pricing now puts the probability of a hike by the September 2026 Federal Open Market Committee (FOMC) meeting at 32.5%, down from 36% over the past 24 hours and 44% a week ago. Odds tied to the October meeting have also softened to 44.5%, from 50% the day before. The September and October FOMC meetings are set to draw heightened attention, with traders watching fresh inflation signals, labor-market data and commentary from Fed Chair Jerome Powell and other policymakers. Further cooling in inflation measures or additional labor-market softening would likely reinforce expectations against a hike, while a renewed pickup in inflation or growth could shift sentiment. Get live prediction market analysis, powered by Vera. Sign up for Vera.