'Powell Is A Total Disaster': Trump Again Slams Fed Chair, Demands Rate Cuts After US Producer Inflation Falls

2025-09-10 10:12:44

(MENAFN- Live Mint) The US Producer Price Index (PPI) unexpectedly fell in August, signaling potential easing inflationary pressures in the economy. According to data released on Wednesday by the Department of Labor, PPI declined by 0.1% month-on-month, defying market expectations of a 0.3% increase. This marks the first monthly drop in producer prices since April.

On a year-over-year basis, the PPI rose 2.6%, a slowdown from July's annual gain, suggesting that inflation at the wholesale level may be moderating. A key contributor to the monthly decline was a decrease in services prices, particularly in trade services, along with falling energy costs.

However, when excluding volatile components such as food, energy, and trade services, core PPI increased by 0.3% month-on-month and 2.8% year-over-year-the largest annual rise since March-indicating that underlying inflationary trends remain persistent.

Market and policy implications

The data arrives at a critical moment, just one week before the Federal Reserve's next policy meeting. Despite President Donald Trump's renewed calls for immediate rate cuts, citing the soft inflation data, the central bank remains cautious.

Trump, posting on his Truth Social platform, declared "Just out: No Inflation!!!" and criticised Fed Chair Jerome Powell as“a total disaster” for not lowering rates sooner.

While headline inflation appears to be easing, core inflation and other indicators, including a softening labor market, are likely to weigh on the Fed's decision. Financial markets currently anticipate a 25 basis point rate cut in the upcoming meeting.

Trade and Monetary Policy

The latest inflation data also coincides with ongoing assessments of the economic impact of the Trump administration's wide-ranging tariffs. Policymakers are closely watching how these trade measures are affecting prices and economic activity.

August's mixed inflation signals complicate the outlook but provide the Fed with some flexibility amid growing calls for policy easing.

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