Fed Rate Hikes Dead? Producer Prices Fall by Largest Amount Since Pandemic

Producer prices dropped 0.4% in June, marking the largest monthly decline since the pandemic and signaling that Fed rate hikes are increasingly unlikely. Year-over-year producer price data shows deflationary pressures mounting across the economy. Back-to-back government reports are rattling the assumptions that have guided Fed watchers for years, with unexpected numbers from the Bureau of Labor Statistics indicating a significant shift in inflation dynamics.