June PPI Misses Forecast by 0.7 Points, Boosting Rate Cut Expectations

According to XTB, June PPI fell to -0.3% month-over-month against a 0.0% consensus and 5.5% year-over-year versus an expected 6.2%. PPI Core MoM came in at +0.2% versus +0.3% expected, and PPI Core YoY at 4.7% versus 5.1% expected, with all measures printing below consensus.

The softer-than-expected data followed Tuesday's downside CPI surprise, with headline inflation declining 0.4% month-over-month against expectations for a 0.1% decline and cooling to 3.5% year-over-year from 4.2% in May. Following the PPI release, the U.S. dollar weakened modestly, a movement consistent with historical patterns where softer producer prices reduce expectations for a more hawkish Federal Reserve.