U.S. producer prices rose in September, and SMBC Americas Chief Economist Joe Lavorgna said persistent inflation makes a December Federal Reserve rate increase more likely than an October move.
The U.S. Bureau of Labor Statistics (BLS) said its final-demand Producer Price Index (PPI) rose 1.3% from August, seasonally adjusted, and increased 6.3% over the 12 months, unadjusted.
Lavorgna described three pressures behind stubborn inflation: demand is running ahead of supply, nominal gross domestic product remains robust and the Middle East crisis continues. He said he would take a dimmer view of the U.S. economy if layoffs rose or hiring slowed.
The Fed raised its target range by a quarter point in September to 3.75% to 4.00%. UBS’s Chief Investment Office separately projected two more increases, in December 2026 and March 2027, in an earlier EconoTimes report on its rate outlook.
The Fed’s next policy meeting is scheduled for Oct. 27-28. The BLS has scheduled its October Consumer Price Index report for Nov. 10 and October PPI report for Nov. 13, both at 8:30 a.m. ET.
