U.S. PPI Stumbles to 2.3%—Misses Forecasts as Inflation Cools

Producer prices just got a reality check. The latest U.S. PPI print slid to 2.3%—undershooting expectations and giving the Fed another data point to overanalyze.

Markets exhale (for now)

Cooling inflation? Check. Nervous traders refreshing Fed speeches? Double-check. The PPI dip adds fuel to the 'soft landing' narrative—though Wall Street will probably find a way to spin it as bearish anyway.

Crypto angles in

Bitcoin barely flinched—because when you’re busy being digital gold, mundane macro noise is beneath you. Meanwhile, altcoins are already pricing in three rate cuts and a partridge in a pear tree.

The punchline

Traders now face their worst nightmare: economic stability. Nothing kills a volatility high like boring old 'moderate growth.' Thanks, PPI—you just made the 0DTE options crowd cry into their spreadsheets.

PPI update: Goods prices rise while services fall

Even though the top-line PPI stayed flat, not every category was still. Final demand goods ROSE 0.3%, mainly thanks to communication equipment, which are most sensitive to trade restrictions and tariffs, surging 0.8%. But that gain got canceled out by a 0.1% drop in services, and snd services make up a big chunk of the U.S. economy.

At the same time, May’s original PPI print got a facelift. The BLS revised it upward, from 0.1% to 0.3%. That might sound small, but it’s actually the biggest jump in wholesale goods prices since February. Within the core goods section again, this means excluding food and energy, there was another 0.3% increase. So even if the headline number didn’t MOVE in June, certain parts of the economy clearly did.

Zooming out a bit, on a 12-month basis, we see the headline PPI came in at 2.3%, down from 2.7% in May. That’s still above the Federal Reserve’s 2% target, but it’s easing. Compare that with the CPI data from Tuesday, where consumer prices rose 0.3% month-over-month, and the annual headline inflation rate landed at 2.7%. Core CPI, which cuts out the noise from food and energy, hit 2.9% year-over-year—its highest level since February.

Trump demands rate cut while markets shrug

Right after the CPI report dropped, TRUMP once again demanded that the Federal Reserve lower interest rates. He wants borrowing costs down. He thinks that’ll help businesses and households. But the market isn’t buying it. And the data is actively proving him wrong.

Traders have since priced in zero chance of a cut in July. Even for September, odds are falling. The Fed hasn’t moved. Officials are still playing it cautious. They’ve said they want to wait and see what the full impact of tariffs will be before pulling the trigger on rates. They believe the U.S. economy is strong enough to handle the pressure… for now.

Back to the PPI: energy prices saw a 0.6% jump in June, and food went up too, but just by 0.2%. One category that really stood out was chicken eggs, which down by 21.8% in a single month.

While the U.S. is dealing with mixed inflation data, the U.K. is facing the opposite problem. According to the Office for National Statistics (ONS), U.K. inflation spiked to 3.6% in June, hotter than the 3.4% expected. That makes it two months in a row sitting above forecast. CORE inflation across the pond hit 3.7%, also above the previous 3.5% reading from May.

The bigger picture here is about expectations. When you expect something terrible and that’s exactly what you get, it’s not exactly a win. Yes, CPI and PPI numbers came in either flat or just slightly below forecast, but they’re still high enough to stress markets. According to Matthew Ryan, head of market strategy at Ebury, “The latest U.S. inflation report practically confirmed that President Trump’s tariffs acted to push up consumer prices in June.”

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