US Producer Prices Blow Up Tariff-Flation Narrative

Following yesterday’s ‘mixed’ CPI, all eyes are on the Producer Prices prints this morning for signs that the inflation pipeline is hotting up (or not)… and the print confirms – it’s not hotting up.

Headline and core PPI printed cooler than expected (unchanged MoM), well below the expected +0.2% MoM.

Headline PPI rose 2.3% YoY (down from a revised higher 2.7% in May and below the 2.5% expected) – that is the lowest YoY print since Sept 2024…

Source: Bloomberg

Core PPI also printed cooler than expected, down to just 2.6% YoY. Core PPI YoY was last lower than this is March 2024…

Source: Bloomberg

Margin pressure lifted this month…

Source: Bloomberg

So much for the terrifying threat of tariff-flation… or will we just have to wait for next month to see the full horror.. or the next month?