The producer price index (PPI) showed inflation rising to 2.6% in June, beating expectations of 2.3%. Core PPI inflation rose to 3.0%, higher than the expected 2.5%. Despite the downward trend in the consumer price index (CPI), PPI inflation has risen in four of the past five months.
These data show rising price pressures on the production side, which may affect consumer prices in the future. Despite market expectations for rate cuts, these data suggest that the central bank may need to more carefully assess the balance between inflationary pressures and economic recovery. Overly optimistic expectations of rate cuts may face adjustments, especially as global economic recovery and supply chain issues remain.
