Whoa ... that Producer Price Index number was not what I was expecting. Overall PPI rose 0.1% in August, while the core PPI (excluding food and energy) was DOWN 0.4%. It looks like a big decline in auto prices (-2.6% for passenger cars and -3.4% for light trucks) accounted for a big portion of the overall decline. Bonds liked the news, and were recently up 21/32 on the long bond future. Will the Fed weight the more bearish CPI report over the more bullish PPI? Will this change the longer-term picture for bonds? Only time will tell.