Capital Economics: PPI is expected to keep the Fed in a moderately loose stance, and the threshold for a substantial rate cut is high

Odaily Odaily News: Paul Ashworth, an analyst at Capital Economics, pointed out in a report on the August PPI that the latest US inflation data provides impetus for the Federal Reserve to start cutting interest rates next week. As expected, PPI rose 0.2% month-on-month last month, while the growth rate in July was revised downward. The core index was 0.3%, higher than expected. Ashworth estimated that together with yesterday's CPI data, the PPI data "suggests a modest increase of 0.14% in the core PCE month-on-month rate, which is preferred by the Fed," and the report will be released on September 27. The Fed is expected to cut interest rates by at least 25 basis points next week, and Ashworth added that the threshold for the Fed to cut interest rates significantly remains high. (Jinshi)