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2w ago

India’s Wholesale Deflation Deepens While U.S. Producer Prices Surge on Tariffs

India’s wholesale and retail disinflation has reached multi-year lows, prompting RBI to forecast a rebound in prices late in the fiscal year.

A Ford vehicle is shown on the assembly line at the Ford Louisville Assembly Plant, Monday, Aug. 11, 2025, in Louisville, Ky. (AP Photo/Darron Cummings)
A man shops for refrigerators in the appliance section at a Home Depot in Washington, D.C., U.S., July 15, 2025. REUTERS/Jonathan Ernst/File Photo
A woman shops for groceries at El Progreso Market in the Mount Pleasant neighborhood of Washington, D.C., U.S., August 19, 2022. REUTERS/Sarah Silbiger/File Photo

Overview

  • India’s WPI fell to -0.58% in July from -0.13% in June, marking a second consecutive month of negative inflation driven by food and fuel deflation.
  • Retail CPI eased to 1.55% in July, an eight-year low reflecting steep declines in vegetable and pulse prices.
  • The RBI’s Monetary Policy Committee has projected quarter-wise CPI at 2.1% in Q2, 3.1% in Q3 and 4.4% in Q4 of FY26 and warned that seasonal food volatility could trigger a price uptick.
  • U.S. producer prices rose 0.9% month-on-month and 3.3% year-on-year in July, the largest monthly gain since mid-2022, led by a 1.1% increase in services costs linked to tariffs and trade-margin pressures.
  • Following the hotter-than-expected PPI report, market odds for a September Fed rate cut narrowed, and analysts raised concerns about BLS data quality after the agency suspended around 350 indexes.