PPI Beats, and the Market Is Now Fully Pricing an October Hike

U.S. producer prices rose 5.4% year over year in August, above expectations. Hike bets were revised up across the board after the release, with an October hike now fully priced. The cross-asset reaction pointed the same way: the 30-year Treasury yield climbed to 5.34%, its highest since June 2007; WTI and Brent both cleared $100; and bitcoin, precious metals and all three major U.S. index futures moved lower together. That combination — equities, bonds, gold and crypto falling in unison — usually reflects a rising discount rate rather than a problem specific to any one asset. August CPI follows at 20:30 tomorrow, with consensus at +0.4% month over month on the headline and +0.2% on core. The core reading is what matters: above 0.2% reinforces the tightening case, while in line or below gives risk assets some room to breathe. Worth remembering that the pass-through from PPI to CPI runs with a lag — a strong PPI print doesn't automatically mean CPI moves in step, since the two use different baskets and weightings. Do you expect a hike in September or a hold? And how would you adjust positioning in this setup? Flexibly allocate across core U.S. tech equities and diversified RWA portfolios on Bitget — achieve efficient cross-asset allocation and precision risk hedging: https://www.bitget.com/promotion/futures-rwa