Goldman Sachs economists in a note estimated that consumers could soon bear up to 67% of tariff costs, up from 22%, thus escalating broader inflation risk. Before the Aug. 14 PPI report, markets were nearly unanimous in pricing a September Fed interest rate cut of up to 0.50%.

A jump in wholesale prices is likely to bolster concerns among Federal Reserve policymakers that rising inflation remains a risk, intensifying debate over the wisdom of a rate cut at their September meeting and leaving the tension between the U.

With the job market faltering and consumer prices not surging as expected, investors increasingly believe the Federal Reserve is about to cut interest rates to boost the economy.