US producer prices rose 5.4% year over year in August, above the 5.3% forecast. Energy costs, led by a 24.1% jump in diesel, drove most of the monthly increase. Friday’s CPI is the final majo
The US Bureau of Labor Statistics reported on Thursday that its Producer Price Index for final demand rose 0.4% in August and 5.4% over the prior twelve months, landing above the 5.3% annual pace economists had expected. The release arrived one day before the August consumer inflation report and less than a week before the Federal Reserve decides on interest rates. Crypto markets were already lower when the data hit. Bitcoin traded near $77,300, off about 2.7% on the day, and the total crypto market value slipped toward $2.64 trillion.
August’s increase came almost entirely from goods. Prices for final demand goods rose 1.1% after two consecutive monthly declines, and energy supplied more than three-quarters of that jump. Diesel fuel alone climbed 24.1%. Gasoline and jet fuel moved higher alongside it, with home heating oil close behind. The pressure traces back to the Iran conflict, which has held crude above $100 a barrel and pushed those costs directly onto producers. Services were quiet by comparison, up just 0.1%, as a 2.3% rise in transportation and warehousing offset softer trade margins.
Core producer prices tell a calmer story. Stripped of food, energy and trade services, they rose 0.3% for the month and held at 4.7% on the year. Fed officials lean on that figure because it screens out the energy swings that dominated the headline number.
Headline · YoY 5.4%ABOVE FORECAST
Est. 5.3% · Prior 4.7% Headline · MoM 0.4%IN LINE
Est. 0.4% · Prior 0.0% Core · YoY 4.7%STEADY
Prior 4.7% Final demand goods · MoM +1.1%ENERGY-DRIVEN
After two monthly falls Diesel +24.1%the single largest contributor to August’s goods increaseProducer prices capture what companies receive at the wholesale stage, before anything reaches a store shelf or a service invoice. Consumer prices capture what households pay. Wholesale pressure does not translate one-for-one into retail inflation, yet it often surfaces in consumer data weeks later, which is why traders read PPI as a preview. Both indexes also feed the personal consumption expenditures gauge that the Fed formally targets.
August CPI is due Friday morning. Forecasts point to a 0.4% monthly gain and a 3.4% annual rate, matching July. A reading near that would leave the inflation backdrop roughly intact. A hotter one would sharpen a debate the central bank is already struggling to resolve.
The path to the rate decision SEP 10 · RELEASED August PPI Wholesale inflation came in above forecast at 5.4% year over year. SEP 11 · NEXT August CPI The last major inflation print before the Fed meets. Consensus: 3.4% year over year. SEP 16 · DECISION FOMC rate call The committee chooses between a hold and a quarter-point hike from 3.50%-3.75%.Here the current moment breaks from the past two years. The committee’s real choice is between holding and hiking, with a rate cut off the table for months now. The target range has held at 3.50% to 3.75% since July, when policymakers voted 9 to 3 to stand pat and all three dissenters pushed for a hike. Chair Kevin Warsh used his late-August Jackson Hole speech to warn that underlying inflation had not slowed, remarks that lifted short-dated Treasury yields and raised the market’s implied probability of a September move.
Those probabilities have shifted with each new print, hovering close to even for weeks. The forecasting community is divided. J.P. Morgan Wealth Management expects a quarter-point hike at the September 16 decision, while Goldman Sachs calls that outcome very unlikely and sees rates unchanged through the end of the year. Thursday’s data tilts the odds toward the hawks without deciding anything.
Higher rates lift the payoff from holding cash and government bonds, which erodes the case for assets that generate no yield and carry more volatility. Crypto sits at the riskier edge of that spectrum. When markets raise the odds of tighter policy, money rotates toward safety and the most speculative positions get cut first.
That played out on Thursday. The 10-year Treasury yield climbed above 4.85%, its highest since November 2023, after the Treasury unveiled a bond buyback triple the size of its standard operation. Equities had already closed lower for three straight sessions. Crypto tracked the same move, and leverage amplified it.
24-hour crypto liquidations$409.24MLong $328.55MShort $80.69MAccording to data from CoinGlass, long liquidations outnumbered shorts by roughly four to one, the signature of a market where traders had positioned for gains and got flushed as prices fell. Most large tokens dropped between 2.5% and 5.5% over the previous 24 hours.
AssetPrice24h7dMarket capBitcoin BTC$77,284-2.72%-1.30%$1.55TEthereum ETH$2,439-2.63%+0.94%$297.64BBNB BNB$715-4.76%+0.26%$95.23BXRP XRP$1.37-4.40%-0.34%$86.01BSolana SOL$100-3.89%-0.62%$58.91BZcash ZEC$1,220-3.69%+44.54%$20.58BZcash ran against the tide, up close to 45% on the week on a catalyst of its own rather than anything tied to the macro picture. Bitcoin’s slide left it near $77,300.
On-chain figures CryptoQuant posted earlier Thursday, when Bitcoin was near $78,400, place the average entry price for the US spot-ETF cohort around $72,000 to $73,000, which keeps the typical fund buyer in profit even after the drop. Net inflows into those products reached $21.9 billion over the past 30 days. That steady institutional bid helps explain why the pullback has stayed orderly instead of accelerating.
Bitcoin’s ETF demand regime has flipped.
– ETF netflow (30D Sum): +$21.9B– BTC: $78.4K– ETF realized price: ~$72–73K
Price is back above the ETF cohort’s cost basis, while flows have turned strongly positive
pic.twitter.com/78Gn98xGVM
— CryptoQuant.com (@cryptoquant_com) September 10, 2026
The timing is the awkward part. Core PCE, the measure the Fed actually targets, will not publish until after the September 16 decision, so the committee will weigh CPI and PPI as stand-ins for the gauge it prefers. For crypto, Friday’s consumer report is the nearer test. A softer CPI would take pressure off risk assets quickly, while a print that confirms the wholesale reacceleration would leave next week’s meeting as the market’s next hurdle.
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