US July PPI missed expectations as energy and food costs fell, reinforcing
recent CPI data that signaled slowing inflation and suggesting the early-war
energy shock is fading. Renewed tensions in the Middle East have, however,
revived concerns about persistent inflation. Fed officials will receive
additional CPI and PPI prints and another labor-market report before the Fed's
mid-September policy decision, leaving policymakers to weigh lingering
inflationary pressure against recent hiring slowdowns. PPI subcomponents that
feed into the Fed’s preferred PCE price index were mixed: portfolio management
fees posted their largest gain in over a year and outpatient hospital care rose
sharply, while physician services and inpatient hospital prices were milder.
