If you’re wondering what a “win” looks like in the world of economic warfare, here it is: Producer inflation dropped in August, and not by a little—it actually went negative. That’s right, prices paid by businesses fell by 0.1 percent, completely defying the same economists who told us Trump’s tariffs would torch the economy like a California wildfire. Instead, they’re now left scratching their heads and adjusting their charts. Again.
Let’s be clear: this isn’t just good news—it’s a data-driven body slam to the Biden-era fearmongering we’ve endured for years. Remember when the media told us Trump’s America First trade policies would send prices skyrocketing and ruin the economy? CNN was practically holding nightly vigils for the “death of global trade.” Well, fast-forward to 2025, and guess what? Prices are stable, the supply chain isn’t collapsing, and the Fed is on its knees debating how big a rate cut to deliver.
According to the Bureau of Labor Statistics, the Producer Price Index (PPI) not only dipped, but its core version—which strips out the noisy stuff like food and energy—also fell 0.1 percent. That’s the first time since April we’ve seen such a drop in services, which are typically stickier than a D.C. lobbyist to a donor check.
Let’s not miss the strategic backdrop here. With inflation cooling and employment data softening, Trump seized the moment—again—by calling for a “BIG” rate cut. And he didn’t whisper it behind closed doors or through some anonymous Fed memo. No, he posted it right there on Truth Social, tagging Jerome Powell like a quarterback calling an audible at the line of scrimmage: “Too Late” must lower the RATE, BIG, right now.
Translation: The Fed’s out of excuses. Inflation isn’t running hot, jobs are cooling, and if Powell wants to keep pretending he’s independent while quietly taking cues from Wall Street, the least he can do is stop kneecapping the economy with high interest rates.
Meanwhile, investors didn’t need a translator. The market popped as soon as the numbers hit, with major indexes up half a percentage point in pre-market trading. And if you’re wondering how serious the Street is taking this, the CME FedWatch Tool is pricing in a 90 percent chance of a rate cut this month. The only question now is whether it’ll be a quarter-point or a half-point—though some, like Blue Chip Daily’s Larry Tentarelli, say the full half-point would be smarter.
Smart, yes. But don’t expect the Fed to jump unless it gets a shove. After all, this is the same Fed that spent most of the Biden years pretending inflation was “transitory” while prices exploded like a piñata at a sugar addict’s birthday party. Now that inflation’s slowing and Trump’s policies are proving effective, Powell and his crew are tiptoeing toward reality like they’re trying not to wake the media.
And speaking of media—notice how quiet the usual suspects are? No screaming headlines about the “collapse of the dollar” or “tariff apocalypse.” In fact, the dollar index has quietly slipped nearly 10 percent this year, giving U.S. exports a boost. That’s right—Trump’s America First strategy is making American goods more competitive abroad. But don’t expect MSNBC to run a ticker-tape parade for that.
The Fed meets next week. Markets are expecting a cut. Trump’s demanding one. The data supports one. But Powell? He’s still consulting his magic 8-ball.
Let’s see if he shakes out “Yes – Definitely” or sticks with “Reply hazy, try again.”