Producer Prices Signal Further Uncertainty for Financial Institutions

Producer prices are up 2.7% over the year ending September 2025. This is a reminder that inflation pressures are not disappearing. The underlying details provide more insight: goods and service prices continue to trend in opposite directions, and the mix has become increasingly uneven cross industries.

Under normal circumstances, this would simply be another data point in the broader inflation narrative. But because October’s major economic reports were cancelled and November’s releases are delayed, markets are operating with additional uncertainty. The producer price report is one of the only “fresh” signals available, and it doesn’t offer a clear conclusion. We have a steady 2.7% year-over-year increase that neither confirms relief nor suggests renewed acceleration.

For financial institutions, this uncertainty matters. When important labor, inflation, and spending data go missing, the margin for error widens. Rate expectations become more volatile, planning gets harder, and forward-looking assumptions rely more on judgement than on fresh evidence.

Despite the lack of “new” data, we continue to see a simple takeaway: we are still in a world where cost pressures haven’t fully eased, even as the headline narrative focuses on cooling consumer inflation. It stops long-term rate expectations from drifting lower, keeps cost pressures from fully easing for businesses, and reinforces the idea that the return to pre-pandemic trends remains uneven.