Update

Wholesale inflation was reported higher than expected this morning reflecting the rise in energy and commodity costs. The Producer Price Index (PPI) rose 1.2% in July versus expectations of 0.6% while the core PPI, which excludes food and energy, rose 0.7% when economists were looking for a rise of 0.2%.

Producers paid 9.8% for the biggest year-over-year gain since June 1981. Excluding food and energy, the increase was 3.5% from a year earlier, its biggest jump since 1991.

Richard Fisher, president of the Dallas Federal Reserve, was speaking to a business group in Aspen, Colorado this morning and said the Fed should remain "poised" to hike rates if slowing growth fails to contain inflation pressure. Fisher said it was too early to tell the likely course of inflation. He said he worried that the economy may have already come down with a case of inflation "fever" from the surge in oil prices.

Former International Monetary Fund (IMF) chief says that the worst of the global financial crisis is yet to come and that a large US bank will fail in the next few months as the world's largest economy continues to have problems. "The US is not out of the woods. I think the financial crisis is at the halfway point, perhaps. I would even go further to say 'the worst is to come'," he told a financial conference.

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